Patience, Pullbacks, and PowerRatings: 5 Stocks for Swing Traders
Prospects of a settlement in Congress kept stocks aloft for a second consecutive day on Friday, though there was evidence of pessimism early.
With stocks on balance on the rise, swing traders who buy weakness and sell strength find themselves in either a patience mode, a profit-taking mode or, hopefully, a bit of both. Although the markets did not get exceptionally oversold early last week, there was enough of a pullback for traders to be able to take advantage as the broader pull of markets moving lower helped put more than a few stocks on sale.
Officially, based on the way that we measure markets, both the S&P 500 and Dow industrials are overbought. Because of this, traders should be looking at these markets for some of the stocks that have been on watch lists, but have been avoided because they were still too expensive in price. Although current readings on both the S&P 500 and Dow industrials reflect overbought markets, they are newly so. This means it is entirely possible — if not likely — for these markets to continue higher for a day or two before becoming so extremely overbought that traders who got in early decide that it is time to take profits.
And it is that profit-taking that will no doubt provide opportunities for the next round of buying, as stocks pull back and are sold off.
Here is a list of five stocks that remain oversold in spite of the buying pressure in the market over the past few days. These are the stocks that swing traders should keep an eye on over the next few days, particularly if these stocks pull back further and lower from current levels.
Bancfirst Corporation of Oklahoma
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PowerRating) Short Term PowerRating 9. RSI(2): 14.79
Raven Industries
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PowerRating) Short Term PowerRating 8. RSI(2): 7.31
Sterling Bancorp
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PowerRating) Short Term PowerRating 8. RSI(2): 9.40
SuperTex Inc.
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PowerRating) Short Term PowerRating 8. RSI(2): 2.63
Wabash National Company
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PowerRating) Short Term PowerRating 8. RSI(2): 6.02
Of the five stocks in today’s report, four have Short Term PowerRatings of 8 and one has a Short Term PowerRating of 9. Our research 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 were even better in the short term, besting the average stock by a more than 13 to 1 margin after five days.
Does your stock trading need a tune-up? Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days.
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Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today.