A Powerful Method For Finding Stocks You Can Trust: 3 Exclusive Picks
In this roaring bull market it seems that you can just throw a dart at a copy of the Wall Street Journal to find stocks you can trust for short term gains. Unfortunately, even during the best of times, it isn’t that easy! However, there are simple proven stock picking systems that are based on statistically valid long term testing that will place the odds of choosing winning stocks for the short term firmly in your favor.
The first and most critical step is to only look at stocks trading above their 200-day Simple Moving Average. This assures that a strong, long term up trend is in place, increasing the odds that you are not buying into a falling knife or catching a stock in a death spiral.
The second step is to drill deeper into the list locating stocks that have fallen 5 or more days in a row. Yes, you heard me right, fallen 5 or more days in a row. I know this fly in the face of conventional wisdom of buying stocks as they climb higher. However, our studies have clearly proven that stocks are more likely to increase in value after a period of down days than after a period of up days.
The third and final step is a combination of whittling the list down even further by looking for names whose 2-Period RSI (RSI)2 is less than 2 (For additional information on this proven indicator click here) and the Short Term PowerRating is 8 or higher.
The stocks that fulfill each of the above steps have proven in extensive, statistically valid studies to possess solid odds of increasing in value over the 1 day, 2 day and 1 week time frame.
Here are 3 stocks with potential you can trust for short term gains!
Orix Corp Ads
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PowerRating) – Short Term PowerRating 9; Above the 200-day SMA; 5 plus lower lows; RSI(2) 0.64
Cabela’s
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PowerRating) – Short Term PowerRating 9; Above 200-day SMA; 5 plus down days; RSI(2) 1.98
Gildan Activewear
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PowerRating) – Short Term PowerRating 8; Above 200-day SMA; 5 plus down days; RSI(2) 1.37
Learn more strategies for trading stocks in the short term with a free trial to our PowerRatings! The highest rated stocks have outperformed the average stock by a margin of more than 14 to 1 after five days! Click here to launch your free PowerRatings trial today!
David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.