PowerRatings Review: At the Pullback’s End?
Selling pressure was strong throughout most of Tuesday. But buyers bid shares higher to keep both the S&P 500 and Nasdaq Composite off their lows.
The race to the 200-day, as Larry Connors has called it, seems to mean among other things that major market averages will have a hard time moving lower for any sustained length of time. The selling so far, for example, has helped boost the PowerRating of theS&P 500 SPDRS ETF
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PowerRating) from an overbought 3 to a neutral 5.
On an individual stock basis, I am seeing a surge in the number of top rated stocks — the list of 10-rated stocks is as long as it has been at any other point this year. What is interesting, again, is that this short term weakness is taking place in the context of a “race to the 200-day”.
Of the stocks I last noted, all five continue to experience significant selling pressure. With the exception of Polo Ralph Lauren
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PowerRating), which closed below its 200-day moving average on Monday, the other four stocks still have PowerRatings of at least 8. RL’s PowerRating downgrade to 7 means that while the stock was still oversold and likely to reverse in the short term, it is a less optimal destination for new capital compared to both the other four stocks noted (included again below) and other 8, 9 and 10-rated stocks.
Here are the four stocks that are still oversold and still have PowerRatings of 8 or higher.
Volterra Semiconductor
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PowerRating) PowerRating of 8. Down four out of the past five days above the 200-day moving average. 2-period RSI of less than 16.
The Steak ‘n’ Shake Company
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PowerRating) PowerRating of 9. Down five out of the past six days above the 200-day moving average. RSI(2) of less than 5.
Steve Madden Ltd.
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PowerRating) PowerRating of 8. Down five out of the past six days above the 200-day moving average. 2-period RSI of less than 20.
Silicon Laboratories
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PowerRating) PowerRating of 9. Down six days in a row. 2-period RSI of less than 2.
And in Ralph Lauren’s absence, I’ll add one of the 10-rated stocks from our latest Top PowerRatings list:
Ruby Tuesday
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PowerRating) PowerRating of 10. Down four consecutive trading days. 2-period RSI of less than 6.
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