Four Top-Rated Low-Priced Stocks for Traders
When trading high priced stocks, traders are often reminded to move the decimal point forward to help avoid being spellbound by triple-digit stock prices. Thus a stock like
Google
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PowerRating) can be treated and traded from a psychological point of view as if it were a stock priced at $67.83 rather than $678.
Does the same trick work for low-priced stocks? Does thinking of shares of TiVo
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PowerRating), for example, at $78.50 make it an easier stock to trade than looking at the stock for what it is: a $7.85 name?
It’s hard to say, but the fact of the matter remains that many traders love low-priced stocks the way that chicks dig the long ball.
Maybe it’s the ability to trade in larger blocks of 100 or even 1,000
shares. Maybe it’s the often impressive percentage gains relative to
their higher priced counterparts.
But whatever the reason, it is always a good idea to have a list of potential trading candidates from among the “under $10” crowd.
While it is true that some of these stocks might eventually become good investment candidates, for the time being, all they represent are short-term opportunities to buy strong stocks that are experiencing temporary weakness. Buy when they dip. Sell when they rally. And move on to the next opportunity.
By strong stocks, I mean “strong” in a trading sense. So I have no idea about the valuations of these stocks, and don’t much care. I know nothing of the managements of these companies, their prospects
for 2008, their exposure to subprime mortgage debt ââ”