5 Top PowerRatings Stocks for Traders
Early weakness in the markets on Wednesday means that many stocks that had been pulling back in recent days are continuing to do so. Here are five stocks that are particularly noteworthy to short term traders looking to buy weakness and sell strength.
All five stocks in today’s report, by the way, have Short Term PowerRatings of 9. Our research, examining millions of short term stock trades between 1995 and 2007, indicated that stocks with Short Term PowerRatings of 9 have outperformed the average stock by a margin of more than 13 to 1 after five days.
Let’s take a look at five stocks, all oversold, all above their 200-day moving averages, all opportunities that short term traders should keep an eye on over the next few days.
Sasol Ltd. ADRs
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PowerRating) Short Term PowerRating 9. RSI(2): 1.97.
In many ways, Sasol Ltd. is a classic stock on pull back. The stock has had a great run in recent weeks, moving from the low 40s in late March to the low 60s in late May.
But profits like that are profits that will be taken sooner or later. And with the stock closing lower for the past four consecutive days, it appears as if that profit-taking moment has arrived. The gap down on Tuesday looks to anticipate even more aggressive selling in the immediate term.
That said, notice also how Sasol reacted the last time its Short Term PowerRating rallied to 8 or higher back in late April: from the low 50s to the low 60s in about a week.
FMC Technologies Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 6.52.
This 9-rated stock has retreated from the low 80s to the low 70s over the past few days as the stock retreats from its recent new highs. And although the stock is still some 10 points away from its 200-day moving average, FTI is significantly oversold with a 2-period RSI of less than 7.
One thing that is especially interesting in this PowerRatings chart is not how the stock responded to PowerRatings upgrades, but how it responded to PowerRatings downgrades. Note how each time the stock’s Short Term PowerRating slipped to 3 or lower, the stock’s upward momentum was stalled.
PetroHawk Energy Corporation
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PowerRating) Short Term PowerRating 9. RSI(2): 9.46
In spite of bouts of low Short Term PowerRatings, shares of PetroHawk Energy have continued to march higher this spring. Fortunately for those who have not yet been able to pick up shares – but wanted to – it appears that there may be a slowdown of sorts in HK.
High Short Term PowerRatings have been very good signals in this stock. Notice how the stock rallied after its Short Term PowerRatings increased in late April. The stock has just begun to “round over” here in late May, as its Short Term PowerRating again begins to increase.
Two other stocks worth watching are Canadian Superior Energy
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PowerRating), with its Short Term PowerRating of 9 and its 2-period RSI of 11.62, and Foster Wheeler Ltd.
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PowerRating), which has a Short Term PowerRating of 9 and a 2-period RSI of 4.42.
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 for TradingMarkets.com.