Swing Trading the Sell-Off: 5 PowerRatings Stocks for Traders
Stocks sold off dramatically on Thursday, with the Nasdaq losing more than 3% and the Dow finishing down by more than 300 points.
For the past several days, I have been suggesting that stocks needed to “come in” or pull back further before we could expect to see the sort of high quality pullbacks that swing traders who buy weakness. While the number of 9-rated stocks were increasing, providing evidence that the quality of pullbacks was improving, stocks up until yesterday had not signaled that they were oversold enough to produce the kind of trading opportunities to the upside that we know the market can and will provide.
Suffice to say that a 300+ point down day in the Dow industrials has changed all of this.
This is what makes swing trading psychologically. Right now too many short term traders are thinking about getting short. After all, what is more bearish than the Dow losing more than 300 points? What is more bearish than the Nasdaq closing down for four sessions in a row?
Our research tells us that these scenarios are not as bearish as many traders think — at least not in the short term. Hidden behind those seas of red is often the green of high Short Term PowerRatings stocks: oversold, pulling back toward support, and among the first and farthest to rally when even the slightest buying pressure returns.
Caseys General Stores Inc.
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CASY |
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PowerRating) Short Term PowerRating 9. RSI(2): 5.41
Amcol International Corporation
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ACO |
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PowerRating) Short Term PowerRating 9. RSI(2): 6.06
Volterra Semiconductor
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VLTR |
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PowerRating) Short Term PowerRating 8. RSI(2): 2.45
Itron Inc.
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ITRI |
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PowerRating) Short Term PowerRating 8. RSI(2): 4.61
Energy Conversion Devices Inc.
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ENER |
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PowerRating) Short Term PowerRating 8. RSI(2): 1.05
While the markets may have further to fall on Friday, we are fairly confident at this point that the markets — the Dow industrials, Nasdaq and S&P 500 — are sufficiently oversold that we can start looking amid the rubble for what has pulled back, but remained strong. In other words, the current market environment is an excellent opportunity to begin looking for gaps down, consecutive down days and high Short Term PowerRatings stocks.
Of the five stocks in today’s report, two have Short Term PowerRatings of 9 and three have Short Term PowerRatings of 8. 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. Stocks with Short Term PowerRatings of 8 have also performed well compared to the average stock, besting the average stock by a margin of more than 8 to 1.
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