The Signal that Preceded a 19% Move in GCO
Each day,
TradingMarkets publishes
7 Trading Ideas for Today, a selection of stocks from our daily indicators. TradingMarkets
Stock Indicators are based upon our latest quantitative research, and
highlight trading edges backed by our database of more than 7-million historical
simulated trades.
On Tuesday,
April 17, Genesco
(
GCO |
Quote |
Chart |
News |
PowerRating) was
the candidate from the
5+ Consecutive Down Days
list.
These are stocks that have closed down for five or more consecutive days and are
trading above their 200-day moving average. Our research shows that stocks
trading above their 200-day moving average that close down for five or more days
have shown positive returns, on average, 1-day, 2-days and 1-week later.
Historically, these stocks have provided traders with a significant edge.
Historically, these stocks have provided traders with a significant edge.
The
TradingMarkets mantra is to “buy weakness,” and that is exactly what you could
have done here. After falling for 5 straight days, GCO became a prime
TradingMarkets stock candidate, a strong stock trading above its 200-day moving
average that has pulled back to extreme levels. The stock bounced on
acquisition rumors, and surged even higher after it was reported that GCO
rejected a $1.2 billion buy-out bid.
1-day later, GCO closed
+2.8%.
2-days later, GCO closed +3.7%.
5-days later, GCO closed +19.4%.
Obviously,
results like these do not occur every time, but
our quantified research clearly shows that the edges exist during extreme
oversold or overbought conditions.
Check out our
latest quantified research articles
here. If
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and develop your own watchlist of stocks with historically-backed edges.
John Lee
Associate Editor