PowerRatings: Out of the Oversold and Into the Higher
All five of the stocks from yesterday’s column (“5 PowerRatings Stocks for the Next 5 Daysâ€) advanced on a day that saw the Dow Jones industrials gain more than 230 points.
I have been suggesting that dramatically oversold markets would eventually produce a rally — and that the more oversold the markets became, the more likely this rally was to be a powerful one.Â
As such, it would not surprise me at all if there is more upside to the current rally.  Although many of the stocks that I have been underscoring advanced on Tuesday, not all have crossed their 5-day moving averages. While this does not mean that these stocks are a good place for new money (those high Short Term PowerRatings stocks that have not yet advanced would be a better home), it does mean that traders who did not take at least partial profits may have another opportunity to do so.
Of yesterday’s five stocks, traders may want to keep an eye on Open Text Corporation
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PowerRating), which still has a Short Term PowerRating of 9, and a 2-period RSI of less than 18. Not quite as oversold, but not yet overbought is Myriad Genetics
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PowerRating) from yesterday’s report. This stock has had a Short Term PowerRating downgrade from 9 to 7, due in large part to its near-2% gain on Tuesday.
Are there other stocks that were actually pulling back as the markets moved higher on Tuesday — stocks that may be more appropriate for new capital? Here are another three stocks that short term traders might want to keep an eye on — particularly if profit-taking early on Wednesday helps bring these stocks low enough to be picked up at quality levels (i.e., 2-6% below their previous close).
DRDGold Ltd.Â
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PowerRating)Â Short Term PowerRating 9. RSI(2): 8.83
Scots Miracle Gro Â
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PowerRating)Â Short Term PowerRating 8. RSI(2): 37.99
New Jersey Resources Corporation
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PowerRating)Â Short Term PowerRating 8. RSI(2): 26.19
Recall 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 have performed even better, besting the average stock by a margin of more than 13 to 1 over the same time period.
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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