The Biggest PowerRatings Upgrades: 3 Stocks Primed for Gains
Rip Roaring would be an adequate term to describe the stock market since September. The DJIA has gained nearly 700 points, pushing ever closer to the legendary 10,000 level. Every bit of news is spun positively and the public is piling back into equities at an unprecedented rate. Greed has been the order of the day with its opposing force fear being shoved back into the corner.
Recently, earning anticipation has fuelled the bullish fever. However, this morning, pharmaceutical stalwart, Johnson & Johnson announced disappointing sales figures letting some air out of the inflated bulls. On a day like today, it’s important to be reminded that markets never go straight up. Every up move is eventually countered with a pullback. This can be clearly seen on all time frames, from the long-term to the micro intraday moves. Ironically, during these bullish times, traders often have the most difficult time finding stocks to buy for short-term gains.
Everything looks overextended and ready for a pull back. Active stock traders need proven tools to keep help them locate stocks that are most likely to outperform over the short-term, regardless of underlying market conditions. For the purposes of this article, I am defining short-term as less than 5 days. Our PowerRatings are one such proven tool.
Developed over the last 14 years of extensive research and proven in actual practice, they clearly place the odds of short term success in your favor. Stocks earning an 8 rating have shown to outperform the average stock at a 5.8 to 1 margin. Those with a 9 rank outperform at a 10.1 to 1 margin and the highest ranked stocks with a 10 Stock PowerRating outperform at 14.7 to 1 margin. There are multiple ways to use the PowerRatings as a stock trading tool. One way is to focus on those stocks that have experienced the largest daily gains in the rankings. Particularly, those companies that move higher by 2 or more levels and are above 7 on the day they are considered. The simple rule is the larger the PowerRatings change to the upside, combined with today’s higher ranking; the better the stock has performed over the next week.
Here are 3 companies that fit the upgrade criteria today:
Avanir Pharmaceuticals
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PowerRating): PowerRatings 8
Targacept Inc
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PowerRating): PowerRatings 9
Pennantpark Investment
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PowerRating): PowerRatings 8
Learn more strategies for trading stocks in the short term with a free trial to our PowerRatings! The highest rated stocks have outperformed the average stock by a margin of more than 14 to 1 after five days! Click here to launch your free PowerRatings trial today!
David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.