After all of Monday's shaking and baking, three stocks ended the session with higher Short Term PowerRatings than they started with. These are among the stocks that traders will be looking to buy on further weakness over the balance of the week.

Should traders buy stocks as soon as their Short Term PowerRatings increase into the "consider buying" green zone of 8, 9 or 10? It is absolutely true that our research into short term stock price behavior, research that included millions of simulated trades between 1995 and 2007, has revealed that stocks with Short Term PowerRatings of 8 or higher have outperformed the average stock by a margin of more than 8 to 1.

So jump in? If you've been reading our PowerRatings commentaries for any length of time, then you know that context is key. The first context is whether or not the stock is above the 200-day moving average. If the stock is above the 200-day moving average, then we can consider the stock for a short term trade.

If, on the other hand, the stock is below the 200-day moving average, then the market must be above the 200-day moving average before we consider the stock—even a high Short Term PowerRating stock—suitable for trading to the long side.

The second important context is weakness. While we want to buy strong stocks, stocks that are trading above the 200-day moving average, we do want to buy those stocks when the market puts them on sale. In other words, we want to be buy strong stocks when they are temporarily weak.

If the sales analogy doesn't work for you, then consider a baseball team with a .600 record. If that team is on a five game win streak and loses a game, how do you think the team will do over the next four games? In all likelihood, if the team really is a good, .600 team, then it is likely to win more of those next four games than it will lose. That's simply part of the nature of good teams.

Sure, there's no guarantee. But the odds are that good teams will tend to win games even--if not especially--after losing the occasional contest.

For present purposes, these "good teams" are the stocks we encourage traders to bet on--every single time one of those stocks shows up on our screen.

This issue of weakness is why we recommend buying stocks with a limit order under the previous close. How far under is a matter of personal preference. If you put your limit order closer to the previous close, say 1% below, then you are likely to get more fills, but your win rate will probably be lower. If you put your limit order farther from the previous close, say 5% or even 8% below the previous close, then you will get far fewer trades, but the ones you do get should be much more profitable.

Again, it is completely a matter of preference how far below the previous close you place your limit order to enter a trade. But as a general method, we think it is the best way for traders to take advantage of temporary weakness in an otherwise strong market.

All three stocks in today's report ended Monday with PowerRatings upgrades to 8. Stocks with Short Term PowerRatings of 8, according to our research, have outperformed the average stock by a margin of more than 8 to 1 over the next five days. Tenet Healthcare (THC | Quote | Chart | News | PowerRating) improved from a Short Term PowerRating of 7 to a Short Term PowerRating of 8. Both Hancock Holding (HBHC | Quote | Chart | News | PowerRating) and Boston Beer (SAM | Quote | Chart | News | PowerRating) opened the Monday session with Short Term PowerRatings of 6.

I have noted the 2-period Relative Strength Index (RSI) values for each stock (PowerRatings charts were not updated for the close as of this writing). Note that all three stocks still have double-digit RSI's meaning that while oversold, they have not yet reached that level of extremely oversold that many, even higher PowerRatings stocks tend to earn.

Tenet Healthcare. RSI(2): 21.51

Hancock Holding. RSI(2): 12.96

Boston Beer. RSI(2): 10.52

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