Did You Catch This Move in GCT Last Week?
Today’s
PowerRatings article will look at how to combine our new Bearish 2-Period
RSI Above 98 list with PowerRatings to maximize our edge in the markets.
Click here to go to our new indicators page.
These are stocks that have a 2-day RSI reading above 98 and
are trading below their 200-day moving average. Our research shows that stocks
trading below their 200-day moving average with a 2-period RSI reading above 98
have shown negative returns, on average, 1-day and 1-week later. Historically,
these stocks have provided traders with a significant edge. To learn more about
our research into stocks that have a 2-period RSI above 98, and how to use this
information,
click here.
One stock setup on our RSI Above 98 list from the close of
2/28/2007:
GMH Communities Trust
(
GCT |
Quote |
Chart |
News |
PowerRating)
GCT had a decline of 6.3% from the open on 3/01/07 through the
close of 3/08/07. Here are the conditions that made GCT a great short on
3/01/07:
1. GCT’s PowerRating was a 3. Stocks rated 3 or lower have
historically underperformed the S&P 500 over the next five sessions.
2. GCT’s 2-period RSI reading was 99.70, showing us that the
stock has had very strong momentum and may be headed lower.
To learn more on how to apply our PowerRatings strategies
attend a free class, presented by market veteran Steve Primo. Topics
covered include timing your entries and exits, daytrading with PowerRatings, and
how to use PowerRatings with our new Preferred Stock List.
Reminder: We are in no way recommending the purchase or short sale of these
stocks. This article is intended for education purposes only. Trading should be based on your own understanding of market conditions,
price patterns and risk; our information is designed to contribute to your
understanding.
From 1995-2005,
stocks with a PowerRating of 8 have outperformed the S&P 500
index on average by an 8.3-to-1 margin, while a PowerRating of 10 doubles that
performance to 16.3.
PowerRatings also help indicate a stock’s
downside as well as timely short-sale entry points; PowerRatings of 1 and 2 have
on average lost money over the next week. A PowerRating of 1 typically
underperformed the S&P 500 by a 5-1 margin.
PowerRatings provides an easy and powerful way
to find trading candidates.
Attend a free class on how to use
PowerRatings, presented by Steve Primo, our Director of Education.
Darren Wong
Associate Editor
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