Nasdaq Trading Strategies for Swing Traders
Stocks began Tuesday on an upswing, rallying after Monday’s aggressive selling brought stocks down from overbought levels to a more neutral range with a bias toward the oversold.
As I write, Treasury secretary Henry Paulson is confronting the well-deserved skepticism of the Senate Banking Committee over the administration’s proposed bailout program. It will be interesting to see, as the hearing plays itself out, whether or not stocks hold up.
First Cash Financial Services
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PowerRating) Short Term PowerRating 9. RSI(2):
What should swing traders be doing – with one eye on Bloomberg, CNBC or Fox Business and another eye on the markets? The markets have been moving fairly rapidly back and forth between overbought and oversold conditions, making trading especially difficult for momentum and breakout traders. For swing traders who look to buy weakness and sell strength, the going has been better – even if traders have had to be more nimble than they have in the past.
Dress Barn Inc.
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PowerRating) Short Term PowerRating 8. RSI(2):
For the moment, patience is the best policy. If stocks reverse the early morning bullishness and resume the selling that characterized Monday’s trading, then we will begin to see better quality pullbacks over the balance of the week. In other words, we will likely see higher Short Term PowerRatings stocks. If however stocks continue to advance, we will quickly see markets become overbought – if not overbought – making it all the more important for traders to take profits in long trades, and all the more opportune for traders who are looking for stocks – or exchange-traded funds – to sell short.
Coldwater Creek Inc.
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PowerRating) Short Term PowerRating 8. RSI(2):
Of the three stocks in today’s report, one has a Short Term PowerRating of 9 and two have Short Term PowerRatings of 8. Our research into short term stock price behavior indicates that stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days. Stocks with Short Term PowerRatings of 9 have performed even better, besting the average stock by a margin of more than 13 to 1 after five days.
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David Penn is Editor in Chief at TradingMarkets.com.