Nasdaq Trading Strategies for Swing Traders: JOSB, INSU, COGT
Stocks are off to a positive start following a streak of selling that ended last week and began this one.
Of the main three indexes, the S&P 500, the Dow industrials and the Nasdaq, the latter is the least oversold. Both the S&P 500 and the Dow have closed lower for four consecutive sessions following their overbought extremes from a week ago. The Nasdaq, by comparison, has been down three in a row.
As I have been pointing out in the last few columns, we have a situation in which the VIX has continued to trend lower, stretching farther and farther below its 10-day moving average. This, as Larry Connors has shown in his most recent book, Short Term Trading Strategies That Work, is a signal that stocks have become increasingly dangerous to own in the near term.
Jos A Bank Clothiers
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JOSB |
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PowerRating) Short Term PowerRating 8. RSI(2): 8.83
At the same time, stocks already have been moving lower, modestly so, but lower nonetheless. This has created increasingly oversold conditions which, as we know, tend to be opportunities to buy stocks, especially high Short Term PowerRatings stocks with low 2-period RSIs that are trading above the 200-day moving average.
Insituform Technologies Inc.
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INSU |
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PowerRating) Short Term PowerRating 8. RSI(2): 21.77
We will see how this works out. For now, the best bet for stock and ETF traders may be to wait for the market to sell-off — as the VIX suggests it might — while keeping an eye on those high Short Term PowerRatings stocks that have already sold off and may be among the first to bounce when buyers first begin returning to stocks. Short Term PowerRatings upgrades from 8 to 9 — as well as 2-period RSIs in the single digits — are clues traders should watch for.
Cogent Inc.
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COGT |
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PowerRating) Short Term PowerRating 8. RSI(2): 10.56
I have included three potential opportunities in today’s report. All three stocks have Short Term PowerRatings of 8. Our research into short term stock price behavior going back to 1995 suggests that stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1.
According to a recent report, eight out of ten securities traded are exchange-traded funds. Want to learn how to trade them? Click here to find out what traders are saying about Larry Connors’ new book, Short Term Trading Strategies That Work: A Quantified Guide to Trading Stocks and ETFs!
David Penn is Editor in Chief at TradingMarkets.com.