Swing Trading with PowerRatings: Model Trade of the Week in Pioneer Drilling
Our Swing Trading with PowerRatings Model Trade of the Week is ^PDC^.
Shares of PDC earned a PowerRatings upgrade to 8 on July 12. For many traders, especially conservative traders, upgrades to 8 can serve as “alerts” that a stock may be on its way toward even higher PowerRatings.
One day later, sellers helped Pioneer Drilling do just that. The stock pulled back again on July 13, closing lower for a third session out of the past four.
With a 3% limit entry strategy, swing traders would need another lower close in PDC in order to take a position in the stock. Note that as of the 13th, the stock has closed in oversold territory for two days in a row.
On the 14th, shares of Pioneer Drilling continued their retreat. Pulling back for a fourth day in a row above the 200-day moving average and moving significantly lower intraday, the stock became a target for traders looking to buy should PDC trade 3% or more below its previous close.
Swing traders who scooped up shares of Pioneer Drilling Company that Thursday did not have to wait long. By the time the markets were closing on Friday, not only was PDC finishing the session back above its 5-day moving average. The stock was up well over 7%, as well.
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David Penn is Editor in Chief of TradingMarkets.com