5 Top PowerRatings Stocks Under $10: CPST, DENN, VLNC, RTK, BCON
As the markets set up for what looks to be a second day of rest after Friday’s intense sell-off, a number of very inexpensive stocks in dollar terms look to become even more inexpensive pull backs.
There’s no point in fading the pain that has been inflicted on any number of investors and traders in the past few days, as resurgent fears of just about everything from more lending losses to inflation and a likely increase in the Fed funds rate gave sellers every excuse they needed to unload shares.
Where does that leave us now? So far, the broader markets have failed to take out the 200-day moving average. This means that our focus as far as buying stocks is concerned should be to stick to those stocks that are trading above their 200-day moving averages – regardless of how high the stock’s Short Term PowerRating is. Although high Short Term PowerRatings have distinct edges over the average stock, those edges diminish significantly when the broader markets are trading below their 200-day moving averages.
Let’s take a look at some of the high Short Term PowerRatings stocks that ARE trading above the 200-day moving average as of this morning’s open.
Capstone Turbine Corp
(
CPST |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 10. RSI(2): 1.86
Shares of Capstone Turbine have experienced PowerRatings upgrades over the past several days, ever since the stock peaked out with a Short Term PowerRating of 3 on June 2nd. Over the past three days alone, CPST’s PowerRating has moved from 6 to 8, from 8 to 9, and from 9 to 10.
CPST still remains very much stretched above its 200-day moving average, which means that there is plenty of room for the stock to come in further. This is true even as the stock’s 2-period RSI – as of the Monday close – was less than 2.
Denny’s Corp
(
DENN |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 12.06
Over the past two months, shares of Denny’s Corporation have reached a Short Term PowerRating of 1 on two occasions. And on both of those occasions, the stock has experienced a sharp pull back, leading to a high Short Term PowerRating pullback opportunity both times.
The last time that Denny’s Corp earned a Short Term PowerRating of 1 was May 30th, when DENN closed at 4.06. Five days later, the stock was closing at 3.86 and a day after that, DENN closed at 3.72, some 8% lower.
Valence Technology Inc.
(
VLNC |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 36.15
The current pullback in Valence Technology was anticipated by a drop in the stock’s Short Term PowerRating to 3, as the stock attempted to break free from a price consolidation zone in early June.
Since that 3-rating on VLNC’s failed breakout, the stock has sold off sharply, losing nearly 24% over the past five days. This kind of pullback is what creates deeply oversold markets, the kind of markets that traders looking to buy weakness should always be on the lookout for.
Rentech Inc.
(
RTK |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 11.58
Only recently trading above its 200-day moving average, shares of Rentech have since begun to pull back to test that 200-day moving average level for support.
RTK has spent the second half of month of May rallying on ever-decreasing Short Term PowerRatings. The stock earned our lowest Short Term PowerRating of 1 on May 29th, which happened to mark the end of the stock’s advance and the beginning of a pullback. Four days and 40 cents to the downside later, RTK had pulled back to its 200-day moving average, earning a Short Term PowerRating of 9 in the process. After a two-day bounce, the stock’s Short Term PowerRating has slipped one point to 8.
Beacon Power Corp
(
BCON |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 47.75
The PowerRatings chart of Beacon Power Corp resembles that of Rentech Inc. in at least one respect: like RTK, BCON just rallied above its 200-day moving average in the second half of May, and has recently pulled back to test that level.
Again, low Short Term PowerRatings in a stock trading above the 200-day moving average helped anticipate the pull back in BCON. From a Short Term PowerRating of 3 on June 3, shares of Beacon Power Corp fell for three straight days, helping create an oversold situation in the stock and an increase in its Short Term PowerRating to a 10 before easing back to an 8 yesterday.
To recap, of the five stocks in today’s “5 Top PowerRatings Stocks Under $10” column, four have Short Term PowerRatings of 8. Our research into short term stock price behavior indicates that stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days.
We also have one stock with our highest Short Term PowerRating of 10. 10-rated stocks, based on our research, have outperformed the average stock by a margin of nearly 17 to 1 over the same 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.
| Click here to start your free, 7-day trial to our Short Term PowerRatings! |
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 of TradingMarkets.com.