PowerRatings Chartology: 3 Stocks for Swing Traders
Stocks shot out of the starting gate on the final trading day of the week, bucking bad news from Fannie Mae and restoring many of the gains lost from Thursday’s sell-off.
This morning in the Morning Market Intelligence for our TradingMarkets Battle Plan for Stocks, I noted that the markets were more or less in neutral territory after Thursday’s decline, with a bias toward the oversold. I also mentioned that now was not the time to be aggressively short, particularly with the overbought condition being worked off and the S&P 500 closing below its 5-day moving average.
So far, the markets have borne out this analysis. What this means is that in the near term traders are best off being patient – if not taking profits from any pull backs traders took advantage of yesterday.
In the meanwhile, let’s take a look at three stocks that are setting up and may provide excellent trading opportunities once the market’s current rally runs its course.
Valence Technology Inc.
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VLNC |
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Chart |
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PowerRating) Short Term PowerRating 9. RSI(2): 0.455.
Valence Technology Inc. has pulled back all the way to its 200-day moving average as of Friday morning. The stock has an exceptionally low, 2-period RSI – by virtue largely of having experienced not just a pullback, but an amazing eight consecutive down days.
The last major pullback in Valence Technology occurred in early July. Five days after VLNC developed a Short Term PowerRating of 8 on July 3 with a close of 3.31, the stock was closing higher by more than 16%
Clayton Williams Energy Inc.
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CWEI |
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News |
PowerRating) Short Term PowerRating 8. RSI(2): 25.02
Even in downtrending markets the principle of buying weakness and selling strength can be a winning one. The PowerRatings chart of Clayton Williams Energy Inc. is one example of this in action.
In both late June and early July, shares of CWEI earned Short Term PowerRatings upgrades to 8 or 9. And in both of these instances, the stock was significantly higher within five days. CWEI added almost 9 points in four days in late June after its PowerRatings upgrade to 9 and more than 11 points in three days in early July after a PowerRating upgrade to 8.
Rigel Pharmaceuticals Inc.
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RIGL |
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Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 4.42.
The last PowerRatings chart we will look at today is the chart of Rigel Pharmaceuticals, which has a Short Term PowerRating of 8.
The last time Rigel Pharmaceuticals earned a Short Term PowerRatings upgrade to 8 or higher was on July 24. That say, RIGL closed at 23.16. Five days later, RIGL was closing at 25.44. Notice also in this PowerRatings chart how well low Short Term PowerRatings early in the second half of July anticipated that pullback.
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David Penn is Senior Editor at TradingMarkets.com.