Looking for stocks that are likely to outperform the average stock over the next five days? Our 5 PowerRatings Stocks for the Next 5 Days is a great place to start.
What’s so special about our 5 PowerRatings Stocks for the Next 5 Days? For starters, all five stocks in today’s report have the sort of high Short Term PowerRatings that short term stock traders can count on – either as final filters to help them separate truly great trading opportunities from the merely good ones, or as a trading method in and of themselves, buying below the previous day’s close and selling the stocks as they recover and begin to show strength.
Or Short Term PowerRatings look at characteristics of volume, trend, momentum and volatility, and allow us to rate stocks on a scale of 1 to 10. The lowest rated stocks, the stocks with Short Term PowerRatings of 1, have actually underperformed the average stock by a margin of nearly 5 to 1 after five days. These are stocks for short term stock traders to avoid or – if they are so inclined, stocks to sell short.
On the other hand, stocks with our highest Short Term PowerRatings have significantly outperformed the average stock after five days. Specifically, we found that stocks with Short Term PowerRatings of 10, bested the average stock by a margin of nearly 17 to 1 in that short term time frame.
Imagine having a set of trade candidates, and then being able to screen them for stocks likely to outperform the average stock by nearly 17 to 1 after five days! I have never seen that parameter on a stock screener, myself. But with our Short Term PowerRatings, you get just that kind of filter to help you trade only the highest probability stocks.
I mentioned trading these stocks on their own, as opposed to using our PowerRatings as a sort of filter. How can traders do that?
We have a pretty simple discipline that works well for many short term traders. We first make sure that our high Short Term PowerRating stock is above the 200-day moving average. This notes the stock as a strong one that is more likely than a weak stock (i.e., a stock trading below its 200-day moving average) to move higher in the near term.
Second we look to buy anywhere from 2-6% below the stock’s previous close. This helps us buy on what we call “intraday weakness.” Because we are buyers of pullbacks, we want to get into stock at the lowest possible position. Allowing a stock to pull back, and then waiting further for sellers to overplay their hand for another day, has allowed us not only to realize a high win rate on a trade-for-trade basis. It has also allowed us to keep drawdowns to a minimum – another goal of the short term stock trader.
All five stocks in today’s report have Short Term PowerRatings of 9 as of late in the trading day on Tuesday. Our research indicates that stocks with Short Term PowerRatings of 9 have outperformed the average stock by a margin of more than 13 to 1 after five days. These are among the stocks that traders who buy weakness and sell strength will be focusing on Wednesday as they look for high PowerRatings stocks undergoing pull backs.
I have also included the 2-period Relative Strength Index (RSI) for each stock. We consider stocks with 2-period RSIs of less than 10 to be oversold, with stocks that have 2-period RSIs of less than 2 being considered extremely oversold.
NextWave Wireless Inc. (WAVE | Quote | Chart | News | PowerRating) RSI(2): 2.35
Children’s Place Retail (PLCE | Quote | Chart | News | PowerRating) RSI(2): 38.91 (from 12.85 on Monday)
Omega Protein Corporation (OME | Quote | Chart | News | PowerRating) RSI(2): 51.72 (from 5.73 on Monday)
Mastercard Inc. (MA | Quote | Chart | News | PowerRating) RSI(2): 2.14
Kindred Health Care Inc. (KND | Quote | Chart | News | PowerRating) RSI(2): 7.70
Does your stock trading need a tune-up? Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days.
Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today.
