An Earnings Shortfall Could Point to a Buy
PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter these trades with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
In the past, buying stocks with a rating of 10 on a 3% pullback the next day and selling five days later has been profitable 75% of the time. The average winner has gained 5.9%. Other entries and exits also show high winning percentages and large average gains.
Bio-Reference Labs (NASDAQ: BRLI) sold off sharply last week after the company lowered its guidance for the fourth quarter. Management warned that pressure on Medicare reimbursement rates would lead to an earnings shortfall. Traders sold the stock on the news but the price seems ready for a possible rebound.
After falling more than 20% last week, BRLi is set up as a potential long trade. The stock is oversold with a PowerRatings of 10 and could be a buy under $28.40.
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All data is as of the end of day on 12/2/2013.