LivePerson (NASDAQ: LPSN) provides companies with the ability to connect with their customers in real-time with chat, voice and video services through websites, social media and mobile devices. The company recorded more than $173 million in sales over the past twelve months. In the most recent quarter, LPSN announced results yesterday that beat analysts’ earnings expectations but management lowered guidance for the full year. Traders sold on the news and the stock ended the day down 8.64%. LPSN is trading above its 200-day moving average (the gold line in the chart below) and remains in a long-term uptrend trading. In How Markets Really Work, we showed buying pullbacks in stocks that are in long-term uptrends can be profitable. LPSN is oversold and will start trading today with a PowerRatings of 8.
PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter trades on stocks with a PowerRatings of 8 or higher with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
In the past, buying stocks with a rating of 8 on a 5% pullback the next day and selling five days later has been profitable 72% of the time. The average winner has gained 3.9%. Other entries and exits also show high winning percentages and large average gains.
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All data is as of the end of day on 2/13/2014.