Nasdaq Trading Report: PowerRatings Strategies for Stocks and ETFs

  • April 16, 2009
  • David Penn

Going into trading on Thursday, the Nasdaq and Nasdaq 100 have edged back into overbought territory below the 200-day moving averages. The ETFs that represent the Nasdaq are similarly overbought below the 200-day, with the PowerShares QQQ Trust
(
QQQQ |
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PowerRating) opening on Thursday with a 2-period RSI of more than 70.

The same can be said of the ProShares Ultra QQQ ETF
(
QLD |
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PowerRating). Conversely, the main inverse ETFs for the Nasdaq 100, the ProShares Short QQQ ETF
(
PSQ |
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PowerRating) and the ProShares UltraShort QQQ ETF
(
QID |
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PowerRating) are both oversold, but are trading below their 200-day moving averages.

QQQQ Chart

With regard to Nasdaq stocks, there are a variety of 8-rated stocks that have pulled back in recent days and may be worth watching by short term traders. These include familiar names such as Amazon.com
(
AMZN |
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PowerRating), which has pulled back for three consecutive days and developed a 2-period RSI of less than 12.

AMZN Chart

… And Dollar Tree Inc.
(
DLTR |
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PowerRating), which has closed lower for five days in a row above the 200-day moving average going into Thursday’s trading. DLTR’s 2-period RSI slipped to less than 11 during this pullback, creating an exceptionally oversold condition in the stock.

DLTR Chart

Here are another pair of Nasdaq stocks that traders may be less familiar with, but which have pulled back significantly and are displaying the kind of low, 2-period RSIs that alert us to potential opportunities in oversold markets.

Riverbed Technologies Inc.
(
RVBD |
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PowerRating). Short Term PowerRating 9. RSI(2): 12.90

Siliconware Precision
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SPIL |
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PowerRating) Short Term PowerRating 8. RSI(2): 10.88

Recall that stocks with PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days. To learn more about the performance of our high PowerRatings stocks, click here.

Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days. Click here to start your free, 7-day trial to our Short Term PowerRatings!

David Penn is Editor in Chief at TradingMarkets.com.