Broad Market Remains Oversold as Boeing Appears on Potential Buy List
Yesterday’s rally did little to change the condition of the broad stock market. Using the portfolio feature at the PowerRatings web site, we can see that ETFs tracking all major stock market indexes except PowerShares QQQ (NASDAQ: QQQ) remain oversold.
Among individual stocks, Boeing (NYSE: BA) stands out as oversold. BA has a PowerRatings of 8 and a ConnorsRSI reading of 8.72.
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 trades on stocks with a PowerRatings of 8 or higher 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 8 on a 3% pullback the next day and selling five days later has been profitable 71% of the time. The average winner has gained 3.1%. Other entries and exits also show high winning percentages and large average gains.
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All data is as of the end of day on 2/4/2014.