Stock Market Shake ‘n’ Bake: 5 Top Stocks for Swing Traders
Stocks ended a volatile session on Wednesday lower, after a coordinated decision by central bankers in the U.S., Europe and the U.K. to lower interest rates failed to inspire sustained buying.
I’ve mentioned anecdotally how the ratio of 9- and 10-rated stocks to 8-rated stocks in our daily Top 25 PowerRatings stocks roster can help us determine whether or not we should have a bias toward buying or a bias toward selling.
Generally speaking, the higher percentage of 9- and 10-rated stocks in the top 25, the more oversold the market and the greater likelihood that stocks will soon be attractive to buyers. And as of Wednesday’s close, I am seeing the highest ratio of 10-rated stocks – to say nothing of 9-rated stocks – to 8-rated stocks that I’ve seen since the first half of July.
It is worth pointing out that the July was the month when stocks made a short term low after a two-month drop from the May highs. From those July lows, stocks rallied for a month before resuming the decline that continues to this day.
It is impossible to say whether or not a 30-day rally is right around the corner. But our Short Term PowerRatings have been a reliable guide in the past. With the caveats of keeping position sizes modest and only buying the most oversold stocks trading above their 200-day moving averages, we will have some excellent short term edges on our side in the event that buyers do return to stocks — if even for a fortnight or two.
Steven Madden
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PowerRating) Short Term PowerRating 10. RSI(2): 0.425
Green Bankshares Inc.
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PowerRating) Short Term PowerRating 10. RSI(2): 0.492
Vertex Pharmaceuticals Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 1.11
UST Inc.
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UST |
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PowerRating) Short Term PowerRating 9. RSI(2): 1.53
Trex Company Inc.
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TWP |
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PowerRating) Short Term PowerRating 9. RSI(2): 2.69
Of the five stocks in today’s report, all have Short Term PowerRatings of 9. We found that stocks with Short Term PowerRatings of 9 have outperformed the average stock by a margin of more than 13 to 1 after five days.
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.
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