Nasdaq Trading Strategies for Swing Traders: NCOC, CALM, TQNT, TESO, SWSI
Stocks finished the day on Wednesday mixed, leaving blue chip stocks in a relatively neutral position and the smaller cap stocks of the Nasdaq increasingly oversold.
With both the S&P 500 and Nasdaq both down for three days in a row, now is not the optimal time for selling stocks short. As a swing trader who buys weakness, your targets for short sales should not be in markets that have already fallen but, rather, markets that have become overextended to the upside.
In other words, in the same way that trades to the long side are based on buying stocks on pullback, trades to the short side begin with selling stocks after they have bounced — not after they have already fallen.
This approach to swing trading is what helps us achieve a relatively high win rate of 70% or more with our trades. By buying oversold stocks — and selling short only those that are overbought — we always have the balance between buyers and sellers on our side. By waiting for extremes of oversold and overbought before taking long and short positions in stocks, we increase our odds of buying from the last seller and selling to the final buyer.
Given the way the markets are developing, with small cap and technology shares more oversold than blue chip stocks, we are perhaps more likely to find higher quality pullbacks in the Nasdaq compared to the Dow industrials. Technology shares were among those most aggressively sold on Wednesday, and the retreat of stocks in this sector may provide another source of opportunity for swing traders looking to buy strong stocks on weakness.
National Coal Corporation
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NCOC |
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PowerRating) Short Term PowerRating 9. RSI(2): 7.30
Cal-Maine Foods Inc.
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CALM |
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PowerRating) Short Term PowerRating 9. RSI(2): 10.41
Triquint Semiconductor
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TQNT |
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PowerRating) Short Term PowerRating 8. RSI(2): 17.28
Tesco Corporation
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TESO |
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PowerRating) Short Term PowerRating 8. RSI(2): 9.95
Superior Well Services Inc.
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SWSI |
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PowerRating) Short Term PowerRating 8. RSI(2): 17.50
Of the 5 stocks in today’s report, two have Short Term PowerRatings of 9 and three have Short Term PowerRatings of 8. Based on our research, 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 fared even better, beating out the average stock by a more than 13 to 1 margin after five days.
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