5 Top PowerRatings Stocks Under $15

Stocks continued to move lower in the first few hours of trading on Thursday as lower initial jobless claims and declining oil prices failed to inspire buyers.

Then again, maybe many buyers are simply waiting for stocks to become even cheaper.

That, at least, is how we like to look at sell-offs. Rather than becoming too preoccupied with a market that looks likely to make new lows for the month (the Dow industrials have already accomplished this dubious achievement), we prefer to look for that cohort of stocks that - however small in number - have remained relatively strong and are simply experiencing some profit-taking while lesser stocks suffer true "get me outta here" selling.

In our mind, that is the difference between the selling that occurs in stocks above the 200-day moving average and the selling that happens in stocks trading below the 200-day moving average. It is often a critical difference, and one that our research into short term stock price behavior has uncovered. This is why we consider the first and most fundamental screen for short term traders to be the 200-day moving average test.

With that, let's take a look at five stocks with high Short Term PowerRatings that are all not only trading above their 200-day moving averages, but also have a dollar price of less than $15.

Optium Corporation (OPTM | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 3.62

9-rated Optium Corporation has been trending lower since June 6th, when the stock failed to follow-through to the upside after rallying from a minor, short term pullback.

Interestingly, during even that minor pullback, the Short Term PowerRatings for OPTM rallied the entire way from 1 to 10 in about five days. The current pullback has seen the stock's PowerRating climb from a recent low of 5 to a high of 9 - once again signaling opportunity in this very oversold, high PowerRating stock.

Vivus Inc. (VVUS | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 7.88

The danger of trying to move too far too fast was underscored repeatedly in recent weeks in shares of Vivus Inc.

As the PowerRatings chart of VVUS shows, on two occasions since late May the stock has spiked higher, only to fall back just as swiftly. While the last pullback in VVUS in early June did not create a high PowerRating opportunity, the most recent pullback does appear to have accomplished this, insofar as the stock has continued to move lower, breaking down below what could have been a short term source of support.

Avant Immunotherapeutics (AVAN | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 2.72

If you ever thought that stocks needed to be hit - and hit hard - in order for them to earn the sort of high Short Term PowerRatings that create winning trades to the upside, take a look at the PowerRatings chart of Avant Immunotherapeutics.

This stock raced higher in a single day spike on the first trading day of June, and has since slipped into a sideways consolidation. However, it appears that the absence of buying pressure has been as effective as would be an abundance of selling pressure because AVAN's Short Term PowerRating has steadily increased from a post-spike low of 3 to a high of 9 as of Wednesday's close.

Trex Company Inc. (TWP | Quote | Chart | News | PowerRating) Short Term PowerRating 8. RSI(2): 4.53

One of the best examples of low Short Term PowerRatings helping identify a pullback that led to a profitable trade can be found in this PowerRatings chart of Trex Company Inc.

Shares of TWP rallied in the second half of May, reaching a high of $14 on an intraday basis before pulling back. With a Short Term PowerRating of 1 on the day of the top, TWP began selling off, losing a little over 20% en route to the $11 level. It was here that the stock developed a best-possible Short Term PowerRating of 10, a mere four days after being a 1-rated stock. Four days later, TWP has soared higher once again in a 2.28, 20% gain, close to close.

Valassis Communications (VCI | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 15.96

Shares of Valassis Communications finally broke down from a sideways consolidation that lasted about a month from early May to early June.

And while there were a number of instances in which VCI earned a high Short Term PowerRating of 9 or even 10 during that consolidation, it is the stock's current pullback that is more likely to create significant opportunities for traders. Off more than 18% as the stock nears its 200-day moving average, VCI is still not as oversold as the other stocks in today's report. Traders looking to advantage of this pullback may want to keep VCI on a watchlist to see if the stock comes in further first.

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.

David Penn is Senior Editor at TradingMarkets.com