5 PowerRatings Stocks Under $15
After gapping higher at the open, stocks are rallying from intraday lows less than 90 minutes after the bell.
Following yesterday’s aggressive selling, stocks are increasingly oversold once again. As I have noted repeatedly over the past several weeks – if not months – the weakness in the market means that traders need to take the appropriate steps to make sure that they are buying quality pullbacks in the right stocks.
Rackable Systems Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 0.781
First off, when markets have a bias to the downside, it is all the more important for traders to limit themselves to high Short Term PowerRatings stocks. These are the stocks that, based on our research through bull market and bear, are the ones that are likely to outperform the average stock after five days and represent one of the few compelling edges potentially available to traders looking to buy stocks in a market characterized by persistent weakness.
Metalico Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 4.31
Second, always look to buy stocks that are deeply oversold. Using the 2-period RSI, “deeply oversold” refers to a reading of 5 or less, with 2-period RSIs of less than 2 being preferable. This is because when markets are weak in general, stocks will have a bias toward being or becoming oversold. Because of this, traders need to make sure that the stocks they look to buy on pullback are oversold beyond the “new normal” oversold conditions that have come to prevail among stocks and markets.
Vaalco Energy Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 0.887
Third and last, if a trader has done both of these steps, an additional step is to find high Short Term PowerRatings stocks with low 2-period RSIs, and then to look and buy those stocks several percentage points below their recent close. This is the “intraday weakness” strategy that we have championed for years – a strategy that is all the more important when markets have a bias toward weakness. Generally speaking, the more volatile markets are to the downside, the more appropriate it is to look for entries that are farther below the previous close – 4% below instead of 2%, or 8% rather than merely 6%, depending on whether a trader is looking to buy intermediate or deep pullbacks.
Fieldpoint Petroleum Corporation
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PowerRating) Short Term PowerRating 9. RSI(2): 20.23
All five stocks in today’s report have Short Term PowerRatings of 9. Our research into short term stock price behavior between 1995 and 2007 indicates that stocks with Short Term PowerRatings of 9 have outperformed the average stock by a margin of more than 13 to 1. Note also the extremely low, 2-period RSIs on three of these stocks – 2-period RSIs of less than 2. We found that stocks that were trading above the 200-day moving average and had 2-period RSIs of less than 2 had positive returns in one-day, two-day and one-week timeframes.
Abraxas Petroleum Corporation
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PowerRating) Short Term PowerRating 9. RSI(2): 1.72
Does your stock trading need a tune-up? Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days.
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Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today.
David Penn is Senior Editor at TradingMarkets.com.