5 PowerRatings Stocks for the Next 5 Days: VHI, AGL, CRM, UTEK, TSYS
Did the pre-market index futures of Monday morning have you thinking that the week might start with a bullish bang?
Every trader who hasn’t forgiven him or herself for thinking that the markets had found a bid yesterday before the opening bell, should probably stop and do it now. We’ve all seen instances when the Plunge Protection Team — in one non-conspiratorial guise or another — has stepped in over a weekend to announce to panic investors that, to steal a phrase, “the government is here to help.â€
And more often than not, in the past the markets have responded positively — even if only in the short-term. Traders may not always be the biggest fans of government intervention in the markets, but when mortgage giants like Fannie Mae
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PowerRating) are teetering and firms like IndyMac actually fail. Well, any port in a storm, as the saying goes.
But Monday’s market would have none of it. As those who hadn’t yet sold, decided that a pre-market rally in the futures was every bit the gift-wrapped opportunity to take profits that, appeared to be, lower, once again, when the markets closed.
Of course, those who look at the markets the way we do, saw the movement lower as helping to remove some of the ambiguity of the final trading days of last week; which left us with a market that was certainly not overbought, but not truly oversold enough to create high-quality trading opportunities to the long side.
Monday’s selling helped that — if only a little bit. Bringing a few additional stocks lower and that much closer to the sort of oversold conditions — and high Short Term PowerRatings — that our research indicates are likely to lead to an outperformance relative to the average stock in the near term.
Below are the 5 PowerRatings stocks for the next 5 days. A set of stocks that because of their unique combinations of volume, volatility, trend and momentum, belong to that class of stocks that our research of short term stock behavior, from 1995 to 2007, says will outperform the average stock by more than 8 to 1. More than 13 to 1 in some cases.
In addition to their high Short Term PowerRatings (8-rated stocks beat the average stock by more than 8 to 1 in our historical testing; 9-rated stocks beat the average stock by an even more impressive 13.5 to 1 over the same time period), all five stocks have low 2-period RSI.
Our research further suggests that stocks with low 2-period RSIs — especially those with 2-period RSIs of less than 2 — have produced positive results in one-day, two-day and one-week time frames.
Here are those stocks:
Valhi Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 9.48
Angelica Corporation
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PowerRating) Short Term PowerRating 9. RSI(2): 1.49
Salesforce.com Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 0.430
Ultratech Inc.
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PowerRating) Short Term PowerRating 8. RSI(2): 12.43
Telecom System
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PowerRating) Short Term PowerRating 8. RSI(2): 13.51
David Penn is Senior Editor at PowerRatings.net