5 Stocks for the Next Five Days: PROS, GMO, NTES, GSX, CDE
Short Term PowerRatings help traders identify those stocks that are most likely to outperform their peers in the near-term. These are the sort of stocks that short-term traders of all types are looking for in order to make the most money in the least amount of time exposed to the market. In volatile markets like these, being able to pick the right stock and trade it at the right time, makes all the difference between making and losing money as a trader.
We did a study involving millions of simulated stock trades between 1995 and 2007. The goal was simple: to find out what factors drive short-term stock movement. By “short-term” we were referring to the 5-8 day/session “sweet spot” in which most swing, momentum and pullback traders operate.
Once we discovered the key drivers of short-term stock movement, we wanted to be able to quantify those results. Was there a way of categorizing those qualities in stocks so that we could divide stocks into different groups–those most likely to make significant short-term gains and outperform the average stock, those most likely to perform as well as the average stock, and those most likely to underperform the average stock?
Our Short Term PowerRatings, which rates stocks on a scale from 1 to 10, are the fruit of this research.
The difference between “top” stocks, stocks that have high Short Term PowerRatings, and stock with low Short Term PowerRatings that traders should avoid is colossal. Stocks at the lowest end of the scale, stocks with a rating of 1, for example, have dramatically underperformed the average stock after five days. We found that 1-rated stocks actually did almost 5 times worse than the average stock after five days.
Compare this to the top stocks, the high Short Term PowerRatings stocks at the other end of the spectrum. Our research revealed that stocks with the highest possible Short Term PowerRatings score of 10 gained nearly 17 times more than the average stock.
How helpful would it be for your trading to be able to tell the difference between a stock that was likely to outperform the average stock 17 to 1, and a stock that was likely to underperform the average stock by 5 to 1? Having seen the effect of Short Term PowerRatings in our own trading, we suspect that after spending a little time with our Short Term PowerRatings, your answer will be: very helpful indeed.
And there may be no better way to learn about our Short Term PowerRating than through a free, 7-day trial. Click here to get access to not only our Short Term PowerRatings for thousands of widely-traded and overlooked stocks alike, but also your free trial will give you the chance to review Nightly Entries and Exits listing, Top Tech Stocks and Top Low-Priced Stocks directories, updated daily.
Market weakness following a big rally can be an excellent time for traders to begin studying high PowerRatings stocks. While the rest of the financial world is worried about whether post-rally weakness is a threat to a continued advance, traders following the TradingMarkets approach to trading know that such weakness can actually be a godsend, allowing traders to buy stocks that may have been too expensive only one session previous.
All five of the stocks in today’s report have Short Term PowerRatings of at least 8. This means that all five belong to that class of stocks which, in simulated testing, outperformed the average stock by more than 8 to 1 over the next five days. I have also noted the 2-period Relative Strength Index values for each stock so that traders can understand how oversold some of these names are–and how their oversold conditions might contribute to a near-term bounce.
ProCentury
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PROS |
Quote |
Chart |
News |
PowerRating). Short Term PowerRating 9. RSI(2) 1.12
General Moly
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GMO |
Quote |
Chart |
News |
PowerRating). Short Term PowerRating 9. RSI(2) 28.04
Netease.com
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NTES |
Quote |
Chart |
News |
PowerRating). Short Term PowerRating 8. RSI(2) 23.12
Gasco Energy
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GSX |
Quote |
Chart |
News |
PowerRating). Short Term PowerRating 8. RSI(2) 20.17
Coeur d’ Alene
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CDE |
Quote |
Chart |
News |
PowerRating). Short Term PowerRating 8. RSI(2) 10.93
David Penn is Senior Editor at TradingMarkets.com.