This Buy Signal Triggered Before a 10% Rise in VLO
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 Friday, April
20,
Valero Energy
(
VLO |
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. VLO was clearly in a strong uptrend, and the extremely oversold
conditions were a perfect setup for a classic mean-reverting bounce.
1-day later, VLO closed
+1.1%
2-days later, VLO closed +4.6%
5-days later, VLO closed
+10.0%
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