PowerRatings Trading Strategies and Stocks on Sale: NFLX, DROOY, STEC
When you look at your screen and see that the Dow, S&P 500 and Nasdaq are all down by more than 2% – closer maybe to 3% – are you thinking: Time to buy? Or time to sell?
One thing I’ve always trained myself to think when I see the markets make significant moves to the upside was this: how do I become one of those traders who is taking profits when these big moves happen – instead of being one of those traders always wondering just when to jump on a train that has already left the station and is accelerating down the rails.
Netflix Inc.
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NFLX |
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PowerRating) Short Term PowerRating 8. RSI(2): 8.22
What makes our approach to short term stock and ETF trading effective is the fact that we look to be on those trains before they leave the station. Rather than chasing markets after they have moved, we focus on spotting markets that have reached overbought or oversold extremes. These are the markets that our research indicates are most likely to make significant short term moves as sellers take profits from overbought markets and buyers rush in to take advantage of bargain prices created by oversold markets.
DRD GoldLtd.
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DROOY |
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PowerRating) Short Term PowerRating 7. RSI(2): 7.60
Right now, with the major markets more or less in neutral mode, there are fewer stocks and ETFs at extreme levels than at other times. I have included here three stocks, however, which remain under selling pressure and, as a result, continue to have the sort of oversold conditions above the 200-day moving average, that are likely to attract buyers in the near term.
Stec Inc.
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STEC |
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PowerRating) Short Term PowerRating 7. RSI(2): 42.58
Short term traders looking to take advantage of these stocks should wait for either Short Term PowerRatings upgrades to the 9 or 10 level. These are the PowerRatings of the stocks that have have performed the best in our simulated testing going back more than a decade. Additionally, stocks traders using PowerRatings as part of their trading strategy have benefited from keeping an eye on the 2-period RSI. Stocks with exceptionally low, 2-period RSIs – ideally, single-digit readings – have also outperformed in the short term and, when accompanying stocks with high Short Term PowerRatings of 9 or 10, often represent some of the best short term opportunities for stock traders.
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!
David Penn is Editor in Chief at TradingMarkets.com.