Stocks fell sharply on Thursday, as traders remained unconvinced that the financial bailout package in Washington would make it out of the House of Representatives intact.
As Larry Connors, CEO and founder of TradingMarkets, noted this morning, we don’t play the "Congress voting" game. We have no idea whether the House will vote yes or no – or if either vote will have an automatic response on Wall Street that can be predicted. You’d probably be better off guessing whether or not the Cubs and the White Sox will meet in the World Series.
We would much rather stick with the trading methods that got us this far – and continue to keep us in the green during a time when many traders and investors are struggling to make breakeven. That’s not bragging. There have been days when trades we put on don’t work out as well as we would like and the only thing we are sure of is that there will be more of those days in the future. But we are grateful to see our trades close profitably far more often than not – and always happy to take whatever gains the market gives us.
Are you comfortable with taking what the markets give you? Comfortable with buying a stock after the market puts it on sale? Comfortable with taking a position in a name that has been down for four, five or even six days in a row? Comfortable with going long a stock that just gapped down by 10% or more?
These are the kinds of stocks we trade – and have traded – for all of 2008, and for years beforehand. What stocks like these have in common is that they tend to have high Short Term PowerRatings of 8, 9 or 10. These are the kinds of stocks whose volatility, momentum, volume and trend-ness have shown them to be likely to outperform the average stock in that short term trading "window" of 5 to 8 days. They are at the cornerstone of what has been a very successful short term stock trading strategy at a very difficult time for the average trader.
NPS Pharmaceuticals Inc. (NPSP | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 11.09
Jo-Ann Stores (JAS | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 0.081
Interdigital Inc. (IDCC | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 4.10
Compuware Corporation (CPWR | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 3.49
Viropharma Inc. (VPHM | Quote | Chart | News | PowerRating) Short Term PowerRating 8. RSI(2): 1.83
Of the five stocks in today’s report, four have Short Term PowerRatings of 9 and one has a Short Term PowerRating of 8. Our research into short term stock price behavior indicates that stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days. Stocks with Short Term PowerRatings of 9 have fared even better, besting the average stock by a margin of more than 13 to 1 after the same short-term timeframe.
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.
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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.