High PowerRating, Low Price: 5 Top Stocks for Traders
Slowly, almost day by day, you can see the quality of potential Short Term PowerRatings stock set-ups improving. Another 10-rated stock appears in our list of Top 25 Stocks … the number of nine-rated stocks doubled overnight, crowding out the good-but-not-great 8-rated stocks…
There are so many ways that traders can use our Short Term PowerRatings to help them not only find specific trading opportunities, but also to better understand the market as a whole. In the audio commentary for our daily stock subscription service, The Battle Plan, Larry Connors made the point that although he felt and observed that the markets were overbought a few days ago, the fact that the number of quality set-ups was so low — almost to the point of being non-existent on one day — kept him from recommending any potential new positions.
As we have seen since, the market has only moved lower over the past week.
If you are a buyer of weakness, then you recognize that this selling will only lead to an opportunity in due time. And if you are a buyer of weakness then some of the main questions on your mind is not about those stocks that are getting completely hammered by the market’s weakness, or trading below their 200-day moving averages and grinding lower.
Instead, you are much more interested in those stocks that had great Mays or great Junes or even great first-two-weeks-of-July. These are the stocks that are being sold now — along with the market’s true losers — the proverbial babies tossed out with the bathwater.
Here are a set of five stocks that fit into this category in one way or another. All five have Short Term PowerRatings of 8 or 9 — putting them in that group of stocks that have historically outperformed the average stock by more than 8 to 1, and more than 13 to 1 in the case of 9-rated stocks.
Stec Inc.
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STEC |
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PowerRating) Short Term PowerRating 9. RSI(2): 5.46
Ultratech Inc.
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UTEK |
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PowerRating) Short Term PowerRating 9. RSI(2): 5.52
Bruker Corporation
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BRKR |
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PowerRating) Short Term PowerRating 9. RSI(2): 4.76
Digimarc Corporation
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DMRC |
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PowerRating) Short Term PowerRating 8. RSI(2): 2.84
Rackable Systems Inc.
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RACK |
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PowerRating) Short Term PowerRating 8. RSI(2): 11.87
All of these stocks — with the possible exception of Digimarc Corporation — are not as oversold as they could — or should — be. Traders interested in any of these stocks should always keep intraday weakness in mind. But especially in the case of those four stocks with 2-period RSIs of more than 3 or 4, traders may want to wait for even deeper intraday pullbacks before taking positions to the long side in these stocks.
David Penn is Senior Editor at PowerRatings.net.