Ultimate PowerRatings Trading Report: Opportunities in Commodities and Country Funds
Going into trading on Monday, stocks and exchange-traded funds (ETFs) that became exceptionally oversold at the end of last week may be in snap back mode – especially as the pre-open futures appeared to indicate a positive start to the Monday session.
If so, there are a number of markets that PowerRatings traders may want to keep an eye on over the next few days. This is all the more so if market strength is relatively slow to return, allowing traders additional time to take advantage of top Stock and ETF PowerRatings stocks and funds as they appear.
Stocks:
For today, the number of stocks with Stock PowerRatings of 9 or 10 is sizable, enabling traders to cherry-pick from a variety of very oversold markets. Among the stocks earning top Stock PowerRatings for Monday are ^JBLU^ (below). JBLU has climbed from an 8-rated stock to a 9-rated stock to a 10-rated stock in three consecutive trading days.
Also earning top Stock PowerRatings for Monday are stocks like ^OSTK^, ^ETH^ and ^MU^.
Traders should be particularly wary of stocks that are trading near their 200-day moving averages. A band of approximately 1.5-2.0% above and below the 200-day moving average represents a zone in which volatility can make short term price behaviors especially difficult to anticipate.
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Exchange-Traded Funds (ETFs):
County funds are among the highest rated exchange-traded funds heading into Monday’s trading. This includes the top rated fund for Monday – the ^EWH^ – as well as a number of other country funds such as the ^RSX^ and the ^EWL^ (below).
There are also a number of commodity-based funds that have earned significant ETF PowerRatings upgrades for Monday. Here, consider funds like the ^SLX^ and the ^XME^. Another widely-traded ETF in this category is the ^OIH^, which earned an ETF PowerRatings upgrade to 9 late in trading on Friday.
Leveraged ETFs:
Traders looking for opportunities in the leveraged ETF market have fewer opportunities than their stock or non-leveraged ETF trading counterparts. As I have noted in the past, once source of trading opportunity when it comes to leveraged ETFs is in inverse leveraged ETFs, which typically earn top leveraged ETF PowerRatings when non-leveraged, non-inverse markets are in runaway mode, becoming more or more overbought every session.
That said, the ^USD^ (above) is one non-inverse leveraged ETF that has pulled back into oversold territory and may be a worthwhile candidate for trades to the long side over the next few days.
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David Penn is Editor in Chief at TradingMarkets.com.