How to Find stocks About to Pull Back
Today’s
PowerRatings article will focus on stocks that have the biggest daily
down changes in their PowerRatings. As the major indices have made nice
moves to the upside in recent weeks, odds are increasing that a pullback will
occur. Let’s take a look at some stocks that may be ready to fall.
These stocks have tended to do especially poorly
if they’ve had a decrease in their rating by at least 2 points or more and they
have a PowerRating of 3 or lower today. The rule is: the bigger the PowerRating
change to the downside, combined with today’s lower PowerRating, the worse
the stock has performed over the next week.
TradingMarkets publishes a daily list of stocks with the
Biggest PowerRatings
Down Changes.
Here are some of today’s “Biggest PowerRatings Down Changes.”
These stocks should be kept on a watchlist and
should have their PowerRatings monitored daily. Â
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. Controlling risk through the use of protective stops is critical.
Here are some charts from the list above:
Core Labs
(
CLB |
Quote |
Chart |
News |
PowerRating)
NeuroMetrix Intl.
(
NURO |
Quote |
Chart |
News |
PowerRating)
Northgate Minerals
(
NXG |
Quote |
Chart |
News |
PowerRating)
Â
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. Obviously, you should ideally be
looking to buy high PowerRating stocks and avoid (or short) low PowerRatings
stocks.
Click here to
try
PowerRatings for yourself, risk free.
You can also
attend a free
class on how to use
PowerRatings
presented by Steve Primo, our Director of Education.
Darren Wong
Associate Editor
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. Controlling risk through the use of protective stops is critical.