PowerRatings and the Nasdaq: 5 Stocks for Traders
Stocks are up modestly in the first hour of trading on Turnaround Tuesday, as extremely oversold conditions lure traders and investors back to the buy side of the markets.
While it is true that oversold conditions can lead to still further oversold conditions – especially below the 200-day moving average – it is also true that even extremely oversold conditions will allow for occasional rallies and bounces as those who are selling short cover their positions and bargain hunters pick up shares of beaten-down stocks.
ICF International Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 1.52
The strongest edges to the upsde, of course, come when markets are trading above the 200-day moving average. Thus, in bear markets where the Dow, the Nasdaq and the S&P 500 are all trading below their 200-day moving averages, traders need to be that much more discriminating in the stocks they choose to trade – even in the short term.
Athena Health Inc.
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ATHN |
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PowerRating) Short Term PowerRating 9. RSI(2): 6.40
Because of this, one of the rules we encourage traders to follow is to avoid stocks that are trading below the 200-day moving average. These are the stocks which, like the markets they belong to, are more likely to become increasingly oversold after reaching oversold extremes, rather than rallying and recovering.
Ultralife Corporation
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PowerRating) Short Term PowerRating 8. RSI(2): 6.09
Another rule is to stick with the highest Short Term PowerRatings stocks. There are often significant edges in the short term for traders who trade stocks with PowerRatings as low as 7. But when markets are under duress, it makes more sense to stick to the biggest and most potentially profitable edges. And one place where these edges can be found most consistently are in stocks with Short Term PowerRatings of 9 or 10.
Nash-Finch Company
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PowerRating) Short Term PowerRating 8. RSI(2): 1.99
Based on our research, stocks with Short Term PowerRatings of 9 have outperformed the average stock by a margin of more than 13 to 1 after five days. 10-rated stocks have performed even better, besting the average stock by a margin of nearly 17 to 1.
Star Scientific Inc.
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PowerRating) Short Term PowerRating 8. RSI(2): 2.81
So when looking for short term trades to the upside, stick to the highest Short Term PowerRatings stocks you can find.
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.
| Click here to start your free, 7-day trial to our Short Term PowerRatings! |
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.
David Penn is Editor in Chief at TradingMarkets.com.