TradingMarkets 4 Top PowerRatings Stocks
Market weakness early on Thursday will likely provide an opportunity for traders looking to buy strong stocks pulling back to support.
Are we in a bull market or a bear market? Regardless of how you answer that question, there are a few rules that traders can follow when markets are under pressure. These rules will not ensure that every trade you make will be a profitable one. No set of rules can promise that.
But what our rules for trading troubled markets can do is make sure that you are making the best bets possible under the circumstances. An old saying goes: there are good trades and bad trades, winning trades and losing trades. Traders will always have losing trades–no trading system produces 100% winners. But what traders can do is limit the number of bad trades, trades that are taken for the wrong reasons, under the wrong conditions or in the wrong stocks.
For example, one of our most basic admonitions–expressed well in Larry Connors’ widely-circulated trading primer, “5 Mistakes to Avoid in a Market Trading Below its 200-day Moving Average.” Published back when the current stock market correction was in its infancy back in the fall of 2007, all of Connor’s recommendations–from not buying stocks that are below their 200-day moving averages to not listening to the “spit” from pundits in the financial media–remain as valid now as they were then.
This thinking is taken to heart in today’s presentation of four stocks with some of the highest Short Term
PowerRatings
in the market. Unlike some other stocks that today are featuring Short Term PowerRatings of 8 or higher, the four in today’s discussion are also all trading above the 200-day moving average.
Again, if there is one mistake to avoid when markets are under pressure, then that mistake is in buying stocks that are below their 200-day moving averages. We have simply found that there is no edge in the short-term to buying such stocks unless and until the broader markets are performing better (i.e., trading above their 200-day moving averages).
All four of today’s top stocks have Short Term PowerRatings of 8. Based on our research, involving millions of simulated stock trades between 1995 and 2006, we found that stocks with Short Term PowerRatings of 8 outperformed the average stock by more than 8 to 1. This outperformance can be all the more pronounced when stocks are bought on intraday weakness, an opportunity the market–as of this writing–is currently affording short term traders.
Votorantim Celulose
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Union Drilling
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Savient Pharmaceuticals
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Gigamedia
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For many people, the best antidote to the buy and hold blues is short-term trading, which allows investors to either trade around a core position or to simply make money from market volatility whether stocks are moving up or down. To learn more about how traders are making money in the short-term “sweet spot” of 5-8 trading days, get our special, Free Report: “5 Secrets to Short Term Stock Trading Success”. We’ll provide you with some of the key factors that traders need to know when looking to buy weakness and sell strength in the stock market. Click here to get your copy–or call us today at 888-484-8220.
David Penn is Senior Editor at TradingMarkets.com.