Swing Trading Between Breakout and Breakdown
Stocks finished the week higher, as two days of aggressive selling created enough fear in the market to bring buyers back on the margins.
Neither very oversold right now nor very overbought, the markets continue to move in the same sideways range that has characterized their movement since mid-October.
And with those with a bullish bias suggesting that a bottom is in and those with a bearish bias hinting strongly that the current sideways movement in the market is only a pause before another major leg lower, we swing traders remain in the middle — taking what opportunities present themselves in the higher Short Term PowerRatings stocks making deep pullbacks still trading above their 200-day moving averages.
Right now, those opportunities are relatively few. Most of the stocks in our Top 25 PowerRatings Stocks have Short Term PowerRatings of 8, but are also trading below their 200-day moving averages. As I have said before, when the major market indexes are trading below their 200-day moving averages, it is simply not worth the time to buy stocks unless they are trading above their 200-day moving averages. Many of the edges that make high Short Term PowerRatings stocks such attractive potential trading candidates are diminished significantly when the Dow, the Nasdaq, the S&P 500 are all trading below their respective 200-day moving averages.
As such, there will be no new stocks in today’s column. We will require either a reversal to bring those stocks that are trading above their 200-day moving averages into deeper pullbacks or, failing that, more progress and follow-through to the upside, which will create the sort of overbought opportunities that will allow us to take advantage of pullbacks in inverse or short exchange-traded funds.
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.