High PowerRating, Low Price: 5 Stocks Under $15 for Traders
With stocks selling off Tuesday, it is no surprise to see a number of stocks either pulling back from recent highs or extending corrections that had begun last week. In both cases, when those pullbacks and corrections occur above the 200-day moving average, we know the likelihood of trading opportunities to the upside, increase.
This approach to trading stocks may seem a bit macabre on first glance, seeing 100-point sell-offs in the Dow industrials as opportunity rather than tragedy. But think about pullbacks and corrections the next time you find yourself watching a great stock move higher and higher — without you — and you may begin to see our perspective.
Our approach seeks ways to buy stocks BEFORE they begin those great moves higher. And our research going back to 1995 suggests that one of the best ways to do that is to buy stocks when they have reached extremes to the downside. This means stocks that are dramatically oversold, that have gapped down by 10% or more, that have fallen for multiple consecutive days. These are our kind of stocks. They are the stocks more likely to be higher in the near term than the average stock. They are the high Short Term PowerRatings stocks that we highlight every day.
With that in mind, let’s take a look at a few — focusing today on those opportunities in stocks with dollar values of less than $15.
Abraxas Petroleum Corp
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PowerRating) Short Term PowerRating 9. RSI(2): 88.33
Health Management Associates Inc.
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PowerRating) Short Term PowerRatings 8. RSI(2): 18.12
UFP Technologies Inc.
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PowerRating) Short Term PowerRating 8. RSI(2): 57.53
STEC Inc.
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PowerRating) Short Term PowerRating 8. RSI(2): 5.37
Petrobras Energy Partners
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PowerRating) Short Term PowerRating 8. RSI(2): 35.45
Of the five stocks in today’s report, STEC Inc. and Health Management Associates are the most attractive. I base this primarily on the 2-period RSI values each stock has, values that are significantly lower than those of the other three stocks. STEC Inc.’s 2-period RSI of less than 6 is especially noteworthy.
Nevertheless, traders would like to do themselves well to either wait for these stocks to pullback further, lowering their RSIs in the process, or to look to enter these stocks on limit orders several percentage points (i.e, 4-6%) below their recent closes. Either method will help reduce risk and go a long way toward ensuring that the traders enter the stock at the lowest levels possible.
Note also that four of the five stocks introduced here have Short Term PowerRatings of 8. Our research into short term stock price behavior indicates that stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days. 9-rated stocks, such as Abraxas Petroleum Corp above, have performed even better, outdoing the average stock by a margin of more than 13 to 1 after the same five day time period.
Does your stock trading need a tune-up? Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days!
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Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today!