Nasdaq Trading Strategies: PNRA, EPIQ, STRA
Stocks are mildly higher on Tuesday, with worse than expected news on the housing front helping keep stock prices muted.
It’s Tuesday, which means it is time for our weekly focus on the Nasdaq, Nasdaq 100 and those stocks in the Nasdaq with the highest Short Term PowerRatings.
The Nasdaq has been drifting lower since reaching an overbought extreme near mid-month. That said, there has been precious little buying or selling pressure to drive the market strongly one way or the other. At present, both the Nasdaq Composite and Nasdaq 100 are in neutral territory.
That said, within the Nasdaq there are a few stocks that are trading above their 200-day moving averages and have pulled back enough to create oversold conditions that are likely to attract traders looking for stocks that are undervalued.
One of these stocks is Panera Bread Company
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PowerRating), which has a Short Term PowerRating of 8. PNRA has closed lower for six out of the past seven trading sessions leading into Tuesday’s trading, the kind of relentless selling that tends to create dramatically oversold conditions and, potentially, opportunities to the upside for short term traders.
As of Monday’s close, PNRA had a 2-period RSI of less than 9.
Another Nasdaq name that short term traders may want to take a close look at is Epiq Systems Inc.
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PowerRating), which also has a Short Term PowerRating of 8.
EPIQ has been moving lower since it made overbought extremes back near the beginning of December when the stock’s 2-period RSI was above 95. Now, with a 2-period RSI of less than 8, the stock has moved from the showcase windows to the bargain bin, where value-oriented traders — to say nothing of mean reversion traders such as ourselves — will once again become interested in the stock.
Lastly, traders may want to put Strayer Education Inc.
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PowerRating) on a watchlist. This stock has a Short Term PowerRating of 7 and a low 2-period RSI.
Like Epiq Systems Inc., STRA last hit an overbought extreme nearly a month ago. Then with a price tag of nearly $240 and a 2-period RSI of nearly 98, STRA has since corrected to less than $208 and a 2-period RSI of less than 15.
David Penn is Editor in Chief at TradingMarkets.com.