Could You Have Predicted This 4.4% Gain in NRF?
Each day,
TradingMarkets publishes
7 Trading Ideas for Today, a selection of stocks from our daily indicators. TradingMarkets
Stock Indicators are based upon our latest quantitative research, and
highlight trading edges backed by our database of more than 7-million historical
simulated trades.
On Wednesday,
April 11, Northstar Realty Finance
(
NRF |
Quote |
Chart |
News |
PowerRating)
was
the candidate from the
2-Period RSI Below 2
list. These are stocks that have a 2-period RSI reading
below 2 and are trading above their 200-day moving average. Our research shows
that stocks trading above their 200-day moving average with a 2-period RSI
reading below 2 have shown positive returns, on average, 1-day, 2-days and
1-week later. Historically, these stocks have provided traders with a
significant edge.
Over and over, we have found
that the TradingMarkets mantra to "buy weakness" has historically worked. The
oversold conditions which generate 2-period RSI levels below 2 have led to a
reversion to the mean. When the stock is stretched too far and for too long, our
statistics show that price has many times bounced back.
1-day later, NRF closed
-1.7%
2-days later, NRF closed -1.5%
5-days later, NRF closed +4.4%
Obviously,
results like these do not occur every time, but
our quantified research clearly shows that the edges exist during extreme
oversold or overbought conditions.
Check out our
latest quantified research articles
here. If
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and develop your own watchlist of stocks with historically-backed edges.
John Lee
Associate Editor