PowerRatings Trading Strategies: 3 Stocks for Traders
In early trading on Thursday, stocks are pulling back from Wednesday’s strong, oversold rally.
As strong as yesterday’s rally was (Barry Ritholtz, CNBC guest commentator, author of the Ritholtz.com blog and participant in our Big Saturday Interview series LINK, referred to it as a pretty good party at which the band never showed up), there are still a significant number of oversold stocks trading above their 200-day moving average.
And while we do not know if buyers who bid shares higher so eagerly on Wednesday will be back on Thursday, we do know that oversold stocks above the 200-day moving average represent some of the best potential trades for short term stock traders looking to buy weakness and sell strength.
Apollo Group Inc.
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PowerRating) Short Term PowerRatings 9. RSI(2): 6.10
There’s no denying that stocks have become a trickier trade over the past several months. As Larry Connors, CEO and founder of TradingMarkets, points out in his daily column today LINK, even champion stock pickers have struggled to make money – to say nothing of producing double digit returns since the bear market began in 2007.
Career Education Corporation
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PowerRating) Short Term PowerRating 8. RSI(2): 2.94
But, as Larry also recently pointed out, our Short Term PowerRatings continue to hold up. With data in from 2008, we continue to see that high Short Term PowerRatings outperform the average stock in the short term. And while we take nothing away from the fundamentally-oriented and technically-oriented professional stock pickers out there — and wish them nothing but good fortune – we remain impressed by and convinced of our approach to “stock-picking”: high Short Term PowerRatings stocks with low 2-period RSIs that are trading above their 200-day moving averages.
Bought on weakness, these “picks” continue to be among the best bets for short term traders.
Harmony Gold Mining Company
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PowerRating) Short Term PowerRating 8. RSI(2): 10.26
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 fared even better, besting the average stock by a margin of more than 13 to 1 over the same time frame.
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.
| Click here to start your free, 7-day trial to our Short Term PowerRatings! |
Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today.
David Penn is Editor in Chief at TradingMarkets.com.