Nasdaq Trading Strategies: 3 Stocks for Swing Traders
The five-day winning streak in the S&P 500 and Dow industrials came to an abrupt end on Monday as traders ended their short-covering and those who made short-term buys on many of those heavily-shorted stocks took their profits. The result was a massive sell-off.
Of course, there was another group of traders taking profits on Monday: they were those who, as we did, began taking short positions in many high Short Term PowerRating exchange-traded funds as they moved higher late last week, becoming more and more overbought in the process.
I’ll describe some of these trades in Wednesday’s Battle Plan Trade of the Week column tomorrow. For now, know that there was more than one story in the trading action on Monday.
Myriad Genetics Inc.
(
MYGN |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 5.00
What’s next for stock and ETF traders looking to buy weakness and sell strength? With regard to ETF trading, the next round of opportunities will come after stocks recover and begin moving higher again. To steal a line, we will know these opportunities by the high Short Term PowerRatings they will earn. It has worked for us before and will remain our gameplan.
Si International Inc.
(
SINT |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 7. RSI(2): 3.15
With regard to stock trading, the sell-off on Monday has helped bring a number of stocks down into extreme oversold territory. And while many oversold stocks are below their 200-day moving averages, there are a few that are still on the “strong” side of that line in the sand and it is those stocks that traders looking to pick up “down but not out” shares should begin watching. Those stocks are presented here.
Bank of the Ozarks
(
OZRK |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 7. RSI(2): 8.81
The fact that we have a relatively high number of stocks with Short Term PowerRatings of 8 and 7 in our Top 25 PowerRatings Stocks roster suggests that we are not at an optimal buying moment for swing traders looking for opportunities to the upside. Keep these names on your watch list and be on the lookout for PowerRatings upgrades should stocks pull back again.
According to a recent report, eight out of ten securities traded are exchange-traded funds. Want to learn how to trade them? Click here to find out what traders are saying about Larry Connors’ new book, Short Term Trading Strategies That Work: A Quantified Guide to Trading Stocks and ETFs!
David Penn is Editor in Chief at TradingMarkets.com.