High PowerRating, Low Price: 5 Stocks for Traders
Stocks ended a rocky session on Tuesday to the downside in advance of the FOMC announcement on Wednesday.
As stocks continue to move lower following the major league sell-off last Friday, the number of high Short Term PowerRatings stocks continues to grow. In addition to alerting us that the broader market is becoming increasingly oversold and more likely to bounce with every trading day that goes by, seeing this many high Short Term PowerRatings stocks lets us know that opportunities to the upside are also increasing.
And just because the number of opportunities is growing, we don’t have to be reckless in order to be both effective and aggressive in taking advantage of stocks that are pulling back. We can — and should — still stick to looking to take long positions only in stocks that are trading above their 200-day moving averages. We can — and should — look for stocks that have pulled back the farthest, using the 2-period Relative Strength Index (RSI) to help spot those stocks that have made the most dramatic pullbacks and become the most oversold.
And last but not least by a long shot, we should always start with the highest Short Term PowerRatings stocks available. These are the stocks that our research indicates tend to outperform the average stock by 8, 13 or nearly 17 to 1 in some instances.
Let’s take a look at the stocks. Today, we focus not just stocks with high Short Term PowerRatings and low 2-period RSIs, but also stocks that have a dollar price of less than $15. These stocks are often a favorite of retail traders who would like to buy positions in size, but are not adequately capitalized to trade large sizes of $50, $75 or $100 stocks.
New Park Resources Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 3.82
Vivus Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 5.88
UT Starcom Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 5.15
U.S. Concrete Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 1.17
Wet Seal Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 3.67
Of the five stocks in today’s report, the stand-out is clearly U.S. Concrete. Insofar as all five stocks have Short Term PowerRatings of 9, the 2-period RSI is the next criteria with which to compare the stocks. And in that regard, U.S. Concrete’s 2-period RSI of less than 2 is truly worth noting.
Also noteworthy are New Park Resources and Wet Seal, both of which have 2-period RSIs of less than 4.
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