PowerRatings and the Revenge of the Son of Short ETFs on Sale

  • February 9, 2009
  • David Penn

Buying late on Monday helped keep the markets at roughly breakeven as traders and investors awaited news on both the President’s stimulus package as well as Treasury secretary Geithner’s financial restructuring plan.

There was enough bullishness in Monday’s trading, however, to generate Short Term PowerRatings upgrades in a number of short or inverse ETFs.  These short ETFs, many of which are also leveraged two-to-one, are high-octane vehicles for traders looking to take advantage of short term swings in the market.

These now 8-rated exchange-traded funds range from index ETFs like the ProShares UltraShort S&P 500 ETF
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PowerRating) and the ProShares Short QQQ ETF
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PowerRating) (the former is leveraged two-to-one, the latter is not) to sector ETFs like the ProShares UltraShort Industrials ETF
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PowerRating).

In the past, high Short Term PowerRatings have helped us time opportunities in short ETFs like these.  Traders who believe that stocks have moved too far too fast may want to look among these high Short Term PowerRatings ETFs for short term, oversold bounces.

If you think, however, that stocks still have room to run, there are a few high Short Term PowerRatings stocks that have been dominated by sellers and are nearing oversold extremes.  These stocks include Thoratec Corporation
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PowerRating) which has a 2-period RSI of less than 15 in addition to a Short Term PowerRating of 8, as well as Wisconsin Energy Corporation
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PowerRating), with a 2-period RSI below 7 and a Short Term PowerRating of 8.

Stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days.  And our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 over the same time frame. Click here to start your free, 7-day trial to our Short Term PowerRatings!

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