The pullback on Thursday allowed traders to scale into positions in a number of stocks, ETFs and leveraged ETFs. And while additional weakness will allow traders to add to these positions, lowering the average costs of the trade, we should not be surprised if a bull market like the one we have experienced since the early spring of 2009 does not suffer oversold conditions for long.
Let’s take a look at the stocks and ETFs earning top Ultimate PowerRatings for Friday. And if you haven’t subscribed to Ultimate PowerRatings yet, click here to start your free, 7-day trial today.
Going into trading on Friday, there are a significant number of stocks that have earned PowerRatings of at least 9. Among these stocks are familiar names like ^RNWK^.
Real Networks has closed in oversold territory for the past two days in a row, earning a PowerRating of 9. The last time RNWK was this oversold was in early February, shortly before a major move from just under $3 per share to more than $5.
Another stock Ultimate PowerRatings traders may want to keep an eye on over the next few days is ^PAY^. PAY was noted in Wednesday’s Ultimate PowerRatings Trading Report.
Compared to Real Networks, VeriFone Holdings has been under the sway of sellers for the past several days. The stock has closed in oversold territory for six consecutive days, earning the stock a PowerRating of 9.
Top rated funds for Friday are mostly a mix of energy ETFs like the ^XES^ and the ^IEO^ (below) – both of which earned PowerRatings of 10 on the close on Thursday.
But there are also a smattering of country ETFs that PowerRatings traders should be watching over the next few days, including the ^EWT^.
EWT has closed in oversold territory for the past two days in a row. That said, the fund has slid closer to its 200-day moving average of late and high probability traders should be wary of scaling-in to the fund if it moves too close (within 1.5% to 2%) of that 200-day moving average level.
With regard to leveraged exchange-traded funds, there are actually more 10-rated leveraged ETFs than there are 9-rated funds. Among those top-10 rated leveraged ETFs for Friday is the ^DIG^.
Given the weakeness and high PowerRatings in non-leveraged energy ETFs, there should be little surprise to see a fund like the DIG among the highest rated leveraged ETFs. Also worth noting on this score is the top ten rating earned by 3x leveraged Direxion Energy Bull 3x Shares ETF ^ERX^.
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David Penn is Editor in Chief at TradingMarkets.com.