High PowerRating, Low Price: 5 Top Stocks for Traders
Talk about two great tastes that taste great together: stocks with high Short Term PowerRatings and stocks with dollar prices under $10.
A popular and well-known swing trader once said that as soon as you have perfected your trading approach, your basic method of consistently taking money from the market, your goal should not be to increase the amount of points you win per trade, but merely to increase your position size.
In doing this, traders avoid changing what often makes a trading system or method successful (clear defined rules governing entries and exits) in a wrong-headed pursuit of greater profits by taking on more risk per trade. Instead, the goal should be to slowly and carefully increase the size of your bets in the market place–all the while maintaining the same basic trading strategy or method that put you in the winning position of being able to increase the size of your trades in the first place.
This, of course, is one of the things that short term stock traders understand and appreciate when it comes to trading low-priced stocks, typically stocks with dollar values of less than $10. It is far easier for the average trader, usually with sufficient but modest capitalization, to scale up his or her position size when trading stocks priced less than $10 compared to trading stocks priced $50 a share, $100 a share, or more.
But the lowest price stock in the world doesn’t mean much if it doesn’t have the right PowerRating. At least that is the result of the research into short term stock price behavior that we conducted, looking at millions and millions of simulated stock trades between 1995 and 2007. We found that, across all price levels, stocks that had higher Short Term PowerRatings were, historically-speaking, better performers over five days than the average stock.
How much better? Stocks with Short Term PowerRatings of 8, according to our research, outperformed the average stock by more than 8 to 1 within five days’ time. Stocks with Short Term PowerRatings of 9 performed even better, besting the average stock by a margin of more than 13 to 1.
Note that all of the stocks in today’s report have Short Term PowerRatings of 8 or 9. I have also provided the closing price for each stock as of Tuesday, April 29, and the 2-period Relative Strength Index values for each stock as of the Tuesday close, as well.
Big Band Networks
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BBND |
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PowerRating) Short Term PowerRating 9. RSI(2): 9.90. Close: $7.32.
Grey Wolf
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GW |
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PowerRating) Short Term PowerRating 9. RSI(2): 0.386. Close: $6.27.
Metallica Resources
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MRB |
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PowerRating) Short Term PowerRating 8. RSI(2): 8.32. Close: $6.32
Aurizon Mines
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AZK |
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PowerRating) Short Term PowerRating 8. RSI(2): 0.343. Close: $4.10
Capstone Turbine
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CPST |
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PowerRating) Short Term PowerRating 8. RSI(2): 35.42. Close: $2.77
There are five things that every successful short term stock trader knows about trading markets like these. We have published all five in a new, special report called “5 Secrets to Short Term Stock Trading Success” now available for free. Learn what key factors are involved in turning mediocre speculators into professional-grade, short-term stock traders–and how our Short Term PowerRatings can play a part. Click here for your free report–or call us today at 888-484-8220.
David Penn is Senior Editor at TradingMarkets.com.