As U.S. markets recovered on Monday, stocks in Japan and China became oversold and could provide buy signals for traders. Vanguard FTSE Pacific ETF (NYSE: VPL) is the only leveraged ETF with a PowerRatings of 10.
PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter these trades with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
In the past, buying stocks with a rating of 10 on a 3% pullback the next day and selling five days later has been profitable 75% of the time. The average winner has gained 5.9%. Other entries and exits also show high winning percentages and large average gains.
In addition to VPL, iShares MSCI Japan (NYSE: EWJ) is oversold with a PowerRatings of 9 and iShares China Large-Cap (NYSE: FXI) has a PowerRatings of 8. EWJ and FXI are non-leveraged ETFs. With additional weakness, any of these ETFs could be buys for short-term traders.
All data is as of the end of day on 12/16/2013.