Twelve of Thirteen Sectors Oversold After Market Selloff
The stock market’s recent selloff has been broad based and all sectors except utilities are now oversold according to PowerRatings.
Most major market indexes are also oversold, with the exception of the NASDAQ 100.
PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter trades on stocks with a PowerRatings of 8 or higher with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
In the past, buying stocks with a rating of 10 on a 3% pullback the next day and selling five days later has been profitable 75% of the time. The average winner has gained 5.9%. Other entries and exits also show high winning percentages and large average gains.
There are also a number of double-leveraged and triple-leveraged ETFs with buy signals on PowerRatings.
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All data is as of the end of day on 1/27/2014.