WLP Gained 4% in Just 5 Sessions
Each day,
TradingMarkets publishes
7 Trading Ideas for Today, a selection of stocks from our daily indicators. TradingMarkets
Stock Indicators are based upon our latest quantitative research, and
highlight trading edges backed by our database of more than 7-million historical
simulated trades.
On Thursday, April
26, WellPoint Inc.
(
WLP |
Quote |
Chart |
News |
PowerRating) was
a candidate from the
2-Period RSI
Below 2
list.
These are stocks that have a 2-period RSI reading below 2 and are trading above
their 200-day moving average. Our research shows that stocks trading above their
200-day moving with a 2-period RSI reading below 2 have shown positive returns,
on average, 1-day, 2-days and 1-week later. Historically, these stocks have
provided traders with a significant edge. To learn more about our research into
stocks that have a 2-period RSI below 2, and how to use this information,
click here.
The
TradingMarkets mantra is to “buy weakness,” and that is exactly what you could
have done here. WLP was clearly in a strong uptrend, and the extremely oversold
conditions were a perfect setup for a classic mean-reverting bounce.
1-day later, WLP closed
+1.6%
2-days later, WLP closed +1.30%
5-days later, WLP closed
+4.0%
Obviously,
results like these do not occur every time, but
our quantified research clearly shows that the edges exist during extreme
oversold or overbought conditions.
Check out our
latest quantified research articles
here. If
you don’t already have a TradingMarkets subscription,
click here
for a free 7-day trial. Check back daily for more 7 Trading Ideas for Today,
and develop your own watchlist of stocks with historically-backed edges.
Darren Wong
Associate Editor
Reminder: We are in no way recommending the purchase or short sale of
these stocks. This article is intended for education purposes only. Trading
should be based on your own understanding of market conditions, price patterns
and risk; our information is designed to contribute to your understanding.