Ultimate PowerRatings Trading Report: Retail Rallies and Gains in Spain
As of Monday’s close, a number of stocks and exchange-traded funds that had earned top Stock and ETF PowerRatings in recent days have made significant gains. Before looking at some potential new opportunities created by the “Goldman Pullback” on Friday, let’s take a brief review of some of the markets that have already advanced from levels which, according to our research and testing, have been historically significant.
Stocks:
Among the more impressive moves in recent days from top rated stocks was the gain of more than 5% by ^HZO^ (below).
HZO earned Stock PowerRatings of 9 on April 12 and again on the 13th. Averaging into the stock would have allowed PowerRatings traders to take maximum advantage of the rally that ensued.
Another specialty retailer to advance in recent days after earning top Stock PowerRatings was ^ZUMZ^. (below).
Here, there was no opportunity to add to the position (as was the case with HZO). But whether traders exited ZUMZ on the close above the 5-day moving average or the more aggressive RSI above 70 exit, traders would have earned a solid return from picking up shares of this top-rated stock last week.
Other PowerRatings stock gainers from last week included ^APKT^, which gained more than 3% after earning a Stock PowerRating of 9.
Exchange-Traded Funds (ETFs):
There are two ETFs from last week that are especially deserving of note. The first was a country fund, the ^EWP^. But what made EWP interesting was that rather than being a top rated fund, EWP had earned our lowest ETF PowerRating of 1 on April 14th. This marked the fund as one that PowerRatings traders should either avoid, or sell short.
Exchange-traded funds that earn ETF PowerRatings of 1 are almost as likely to move lower as ETFs with PowerRatings of 10 are likely to move higher. This means that advanced traders who feel comfortable with selling short should keep an eye on funds like EWP when they earn major ETF PowerRatings downgrades to 2 or, even better, 1.
There was one leveraged exchange-traded fund that made significant gains over the past few days.
The ^EUO^ has been especially volatile of late. And in that volatility there has been opportunity in the short term for traders. In particular, those opportunities emerged to buy EUO when it earned Leveraged ETF PowerRatings of 9 on April 12 and again on April 14. A few days later, EUO was rallying into strength above the 5-day moving average.
Looking forward, some of the biggest edges are in country funds that have pulled back above the 200-day moving average. Typical of these potential opportunities is the pullback in the ^ILF^, which earned an ETF PowerRating of 9 as of the Monday close.
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David Penn is Editor in Chief at TradingMarkets.com.