Selling the Buying: Profit-Taking Strategies for PowerRatings Traders
If PowerRatings is based on buying pullbacks, will high PowerRatings stocks continue to work even when the broader market is moving higher?
In my past PowerRatings analysis from the beginning of the week (“3 Top PowerRatings Stocks for Short Term Traders”) I highlighted three stocks — Children’s Place Retail
(
PLCE |
Quote |
Chart |
News |
PowerRating), Scholastic Corporation
(
SCHL |
Quote |
Chart |
News |
PowerRating) and Martha Stewart Living Omnimedia
(
MSO |
Quote |
Chart |
News |
PowerRating) – that short term traders might want to keep an eye on over the next few days. As of midday on Thursday, all three stocks are moving higher, crossing above their 5-day moving averages and look likely to close up for the day.
Penn National Gaming
(
PENN |
Quote |
Chart |
News |
PowerRating)
With markets overbought then and even more overbought now, I suggested that PowerRatings traders consider waiting for stronger pullbacks and a wider variety of stocks to choose from. But for those active traders, the three stocks above are examples of how stocks with high PowerRatings continue to perform well in the short-term, whether the broader market is moving higher or lower — or even sideways.
Stage Stores Inc.
(
SSI |
Quote |
Chart |
News |
PowerRating)
The performance of these stocks notwithstanding, the fact that the markets are becoming even more overbought means that there will be even fewer high PowerRatings stocks for short term traders to choose from. From Wednesday to Thursday, for example, the number of 9-rated stocks plunged by more than half, reflecting the relative lack of oversold stocks pulling back above their 200-day moving averages. Such stocks are the bread and butter of mean reversion traders and are the same sorts of stocks that often earn the high PowerRatings we watch for every day.
Orix Corporation ADRS
(
IX |
Quote |
Chart |
News |
PowerRating)
That said, I’ve included charts throughout this article of three more stocks with high PowerRatings that short term traders may want to keep an eye on over the next few days. As always, continued weakness will offer potential opportunities for patient traders.
Join Larry Connors live, Thursday, September 10 at 4:30 pm for a special presentation for our upcoming Swing Trading College. The Swing Trading College remains our number one, most popular course and this is the seventh time we’ve offered it. The class runs 14 weeks and covers short term trading of stocks, ETFs (3 weeks of ETFs), options, e-minis’s and building a full trading plan – along with 4 weeks of live trading.
In this class Larry will be also introducing for the first time a new high probability stock trading strategy, along with trading additional strategies to trade ETFs including Leveraged ETFs.
If you’d like to attend the presentation, you can register here.
David Penn is Editor in Chief at TradingMarkets.com.