PowerRatings RoundUp: 3 Pullbacks for Short Term Traders
Looking back at the stocks highlighted at the beginning of the week (5 PowerRatings Stocks for the Next 5 Days) we see a few of those names already rallying into strength. Should the bullishness indicated by pre-market futures Wednesday morning encourage buying over the course of the trading day, then it is likely that more of these high PowerRatings stocks will move into profit-taking territory above their 5-day moving averages.
Children’s Place Retail
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PowerRating). This stock closed above its 5-day moving average on Tuesday, gaining more than 3% on the day – and more than 3% since we mentioned the stock in the 5 PowerRatings Stocks column.
Avis Budget Group Inc.
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PowerRating). CAR also closed above its 5-day on Tuesday, climbing more than 8% over the session.
Finally, Volterra Semiconductor
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PowerRating) edged above its short term moving average on Tuesday, as well. It’s rally was not as impressive as that from Children’s Place and Avis. But it was enough strength for PowerRatings traders to take profits and look to move to the next trade.
Speaking of the next trade, here are a few high PowerRatings stocks that are still pulling back in the first half of trading on Wednesday. Remember that we look to buy high PowerRatings stocks, stocks with PowerRatings of at least 8, as they pull back above their 200-day moving averages. Our research into short term stock price behavior, going back to 1995, indicates stocks with PowerRatings of 8 or higher have tended to outperform the average stock by a margin of more than 6 to 1 after five days.
Learn more about PowerRatings performance in our report: PowerRatings Does it Again – Results for 2008.
Jo-Ann Stores
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PowerRating) has a PowerRating of 10, our highest PowerRating. Stocks with PowerRatings of 10 have outperformed the average stock by a margin of more than 14 to 1 after five days.
The stock has closed lower for three days in a row and is moving lower again on Wednesday.
Down 5 out of the past 6 trading days and down again today are shares of Plantronics Inc.
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PowerRating)
PLT is trading at its most oversold levels since mid-May and now has a 2-period RSI of less than 9 intraday on Wednesday.
Lastly, Kensey Nash Corporation
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PowerRating) has closed lower for four days in a row above the 200-day moving average and is continuing to pullback in the first few hours of trading on Wednesday.
Trading at its most oversold levels since breaking out above its 200-day moving average early in the second half of May, KNSY has an intraday 2-period RSI of less than 14.
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.
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