What the Cramer Loving Cabbie Doesn’t Know: 3 Exclusive Short Term Stock Picks
The cab driver overheard me talking stocks on the phone and just had to provide his favorite companies, views on Cramer and even a few trading tips! It is amazing how much everyone thinks they know about the market and trading. It’s said on the Street that once you hear the shoe shine guy, barber and cabbie talking the market that’s a sure sign that bull move is over or nearly over.
Well, no one knows for sure, but I am certain there are several ex-hedge fund managers driving New York City cabs right now, so maybe my stock picking cabbie managed a $100 million dollar fund last year! Who knows?!
When it comes to stock picking there are methods that are proven to place the odds firmly in your favor for short-term gains. You don’t have to depend on random tips even from potential ex-hedge fund manager, Cramer worshiping cab drivers. This article will lay out the 3 basic steps for short-term stock picking success and provide 3 choice picks that fit the criteria right now.
The first and most critical step is to only look at stocks trading above their 200-day simple moving average. This assures that a strong, long-term up trend is in place, increasing the odds that you are not buying into a falling knife or catching a stock in a death spiral.
The second step is to drill deeper into the list locating stocks that have fallen 5 or more days in a row or experienced 5 plus consecutive lower lows. Yes, you heard me right, fallen 5 or more days in a row. I know this fly in the face of conventional wisdom of buying stocks as they climb higher. However, our studies have clearly proven that stocks are more likely to increase in value after a period of down days than after a period of up days.
The third and final step is a combination of whittling the list down even further by looking for names whose 2-period RSI(2) is less than 2 (Click here for RSI(2) explanation) and the Short Term PowerRating is 8 or higher.
The stocks that fulfill each of the above steps have proven in extensive, statistically valid studies to possess solid odds of increasing in value over the 1 day, 2 day and 1 week time frame.
Here are 3 interesting names meeting the criteria for your watch list:
Orix Corp Ads
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IX |
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PowerRating): Short Term PowerRating 9; 5 plus lower lows; RSI(2) 0.08
Stec Inc
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PowerRating): Short Term PowerRating 8; 5 plus lower lows; RSI (2) 0.40
Bally Tech
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PowerRating): Short Term PowerRating 9; 5 plus down days; RSI(2) 1.08
Block Buster
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PowerRating): Short Term PowerRating 10; 5 plus down days; RSI(2) 1.31
Learn more strategies for trading stocks in the short term with a free trial to our PowerRatings! The highest rated stocks have outperformed the average stock by a margin of more than 14 to 1 after five days! Click here to launch your free PowerRatings trial today!
David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.