A Surplus of Sellers Reveals Growing PowerRatings Opportunities
With the dust settled on Tuesday’s trading, stocks were little changed and oversold conditions continue to dominate the markets.
Oversold conditions are most severe in the Dow industrials, which have closed lower for five consecutive trading sessions. The Nasdaq, while still oversold, is much less so by comparison, with its 2-period RSI more than doubling from Monday’s close to Tuesday’s close.
Looking at the high Short Term PowerRatings stocks we’ve most recently presented, a number of them closed higher on Tuesday: Royal Gold
(
RGLD |
Quote |
Chart |
News |
PowerRating), ICF International
(
ICFI |
Quote |
Chart |
News |
PowerRating), UltraLife Corporation
(
ULBI |
Quote |
Chart |
News |
PowerRating) and Star Scientific Inc.
(
STSI |
Quote |
Chart |
News |
PowerRating). Only CH Energy Group
(
CHG |
Quote |
Chart |
News |
PowerRating) continued to move lower.
What have these moves done to the Short Term PowerRatings of these stocks? As of Tuesday’s close, the first four stocks all still have Short Term PowerRatings of 8 or higher. ICF International, for example, actually had seen a Short Term PowerRatings upgrade from 8 to 9.
As such, all four stocks are stocks that short term traders can continue to consider for potential upside. That these stocks have maintained their high Short Term PowerRatings even as they moved moderately higher on Tuesday may represent a rare opportunity for traders who feel as if they need to see someone else diving into the pool before sticking their own toe in the water.
Follow-through to the upside in any of these stocks should not surprise anyone, particularly given the fact that the major markets continue to feature relatively low 2-period RSIs. This means that even if the stock moved higher on Tuesday, it still has a surplus of sellers — sellers who are likely all the more ready to consider exiting the stocks given their Tuesday advances.
For its part, CH Energy Group has earned a Short Term PowerRatings downgrade to 7. While not the worst rating possible for a stock, it is a PowerRating shift in the wrong direction. Traders are better off focusing on the other four stocks mentioned in this report — at least until CHG’s Short Term PowerRating starts heading in the other direction.
Want to take your trading to another level? Click here to find out more about Larry Connors’ new book, Short Term Trading Strategies That Work: A Quantified Guide to Trading Stocks and ETFs!