5 Top PowerRatings Pullbacks for Traders: CMI, SVR, IBKC, MYGN, THC
Mixed markets continue to create opportunities for traders who find weakness more attractive to buy than strength.
If we look kindly on big sell-offs, the kind of sell-offs that knock great stocks down to where they can be repurchased again at reasonable prices, then we have a no less special place in our heart for the listless, sideways markets that often follow the big sell-offs.
As I have written before, markets do not have to crash in order to become oversold. Many times, it is after the big sell-off when markets start to move in those stunned, small-range type of sessions that the stocks within those markets recover, stand put, or continue lower. And it is the “continue lower” crowd that we are most interested in, once the fireworks of the big sell-off have subsided.
Here are a set of five such “continue lower” stocks. All of them have the sort of high Short Term PowerRatings that we look for in stocks. And all are trading above their 200-day moving averages — meaning that they are stocks we can feel comfortable trading to the long side. Let’s take a closer look to see which of these five might represent the best opportunities for traders in the short term.
Cummins Inc.
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CMI |
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PowerRating) Short Term PowerRating 9. RSI(2): 9.08
Syniverse Holdings
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SVR |
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PowerRating) Short Term PowerRating 9. RSI(2): 0.539
Iberiabank Corp
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IBKC |
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PowerRating) Short Term PowerRating 8. RSI(2): 0.228
Myriad Genetics Inc.
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MYGN |
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PowerRating) Short Term PowerRating 8. RSI(2): 3.47
Tenet Healthcare Corp
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THC |
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PowerRating) Short Term PowerRating 8. RSI(2): 2.42
Of the stocks in today’s report, Syniverse Holdings is clearly the most interesting. This is not only because the stock has our second-highest Short Term PowerRating of 9, but also because the stock has an extremely low 2-period RSI of less than 1.
Similar in that regard is Iberiabank Corp, which has a Short Term PowerRating that is one point lower than SVR, but has a 2-period RSI that is half again as small at 0.228.
In both Syniverse Holdings and Iberiabank Corp, we are seeing two extremely oversold stocks. This degree of negative, bearish sentiment happens from time to time, but it reflects a stock that is almost loathed – at least for the moment – by traders and investors. These are the stocks that, while still trading above their 200-day moving averages, often are experiencing true seller’s stampedes. These are the stocks that are down five or more consecutive days, the stocks that are gapping down big at the open and finishing lower …
But in spite of their often awful appearance, it is stocks like these that offer the best rewards for traders who buy weakness and sell strength.
To recap, two of the five stocks in today’s report have Short Term PowerRatings of 9, while three have Short Term PowerRatings of 8. We have found through our research that stocks with Short Term PowerRatings of 8 have tended to outperform the average stock by a margin of more than 8 to 1 after five days. Stocks with Short Term PowerRatings of 9 have fared even better, besting the average stock by a margin of more than 13 to 1 over the same, short term, time frame.
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.