SPDR S&P 500 ETF (NYSE: SPY) recovered from Tuesday’s selloff with a 1.75% gain on Wednesday. The rally was broad with 78% of New York Stock Exchange-listed stocks ending the day up. On the NASDAQ, 69% of stocks were higher for the day. Despite the large gains in many stocks, there were a number of oversold stocks at the end of the day.
Using The TradingMarkets Screener, we can quickly identify how many stocks are oversold or overbought. The simple screen shown below identified 151 stocks as oversold with ConnorsRSI readings below 20 at the close on Wednesday.
Setting the ConnorsRSI filter to “80 or above” and re-filtering the results shows that 306 stocks ended the day overbought. This demonstrates that there are a number of trading candidates in almost any market environment. Using the screener, we can also generate a short list of trading candidates by adding filters. For example, just five ETFs are trading above their 200-day moving average, oversold on ConnorsRSI and at least as volatile as the broad stock market.
Each of these ETFs should be considered a potential short-term buying opportunity,
Now let’s look at the most overbought and oversold stocks (according to ConnorsRSI) heading into trading for October 9, 2014. ConnorsRSI is a proprietary and quantified momentum oscillator developed by Connors Research that indicates the level to which a security is overbought (high values) or oversold (low values).
MIL (Mfc Industrial Ltd) is the most oversold stock for the second day in a row with a ConnorsRSI reading of 0.12.
YMLP (Yorkville High Income MLP ETF) is the most oversold non-leveraged ETF with a ConnorsRSI reading of 1.95.
PST (ProShares Ultrashort 7-10 Year Treasury) is the most oversold leveraged ETF with a ConnorsRSI reading of 9.16.
WEC (Wisconsin Energy Corp) is the most overbought stock with a ConnorsRSI reading of 99.31.
LQD (iShares iBoxx $ Invst Grade Crp Bond) is the most overbought ETF with a ConnorsRSI reading of 96.01.
TradingMarkets Lists provide users pre-populated lists of stocks and ETFs identifying symbols with overbought and oversold ConnorsRSI and Bollinger Bands® readings. The Screener Lists are powered by The TradingMarkets Screener.
All data is as of the end of day on 10/8/2014.