PowerRatings Review and Outlook: EK, IP, NVDA, DELL, AXP
All five of the stocks in my last PowerRatings column, “5 PowerRatings Stocks for the Next 5 Days” continue to be stocks that high probability ETF traders should be focused on.
As of Wednesday’s close, all five of those stocks have PowerRatings of 8. This puts all five: Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating), International Paper
(
IP |
Quote |
Chart |
News |
PowerRating), Nvidia Corporation
(
NVDA |
Quote |
Chart |
News |
PowerRating), Dell Inc.
(
DELL |
Quote |
Chart |
News |
PowerRating) and American Express
(
AXP |
Quote |
Chart |
News |
PowerRating) – in that category of stock that has outperformed the average stock by a margin of more than 6 to 1 after five days in our historical testing.
Ideally, these five stocks will continue to display weakness. Remember that while 8-rated stocks have performed well historically, the biggest edges are to be found in those stocks that have earned PowerRatings of 9 or higher. After all, 9-rated stocks have bested their peers by nearly 10 to 1 after five days, while stocks with PowerRatings of 10 have outperformed the average stock by more than 14 to 1.
Not only will continued weakness likely boost the PowerRatings of some or all of these stocks, but recall that intraday weakness is a key strategy when it comes to trading high PowerRatings stocks. As Larry Connors notes in his PowerRating trading primer: PowerRatings Does It Again – Results for 2008, using limit orders below the stock’s most recent close is a way for high probability PowerRatings traders to take maximum advantage of mean reversion and the fact that larger pullbacks tend to produce bigger bounces and better trades.
In addition to the five stocks noted earlier in the week – all of which should remain on traders’ PowerRatings radar – here are a few stocks that have already pulled back enough to earn PowerRatings of 9.
Motorola Inc.
(
MOT |
Quote |
Chart |
News |
PowerRating). RSI(2): 4.67
Lululemon Athletics
(
LULU |
Quote |
Chart |
News |
PowerRating). RSI(2): 9.90
Tiffany & Company
(
TIF |
Quote |
Chart |
News |
PowerRating). RSI(2): 5.09
Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of more than 14 to 1 after five days. Click here to start your free, 7-day trial to our Short Term PowerRatings!
David Penn is Editor in Chief at TradingMarkets.com.