Stocks are out of the starting gate with a bang on the final trading day of the week. The futures were pointing to a strong opening and a strong opening is just what traders got: with the Dow up more than 170 points in the first hour of trading on Friday.
National Instruments Corporation ( NATI | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 1.92
The markets had been more or less neutral going into today's trading. Stocks in general reached oversold extremes on Tuesday of this week, and have had a bias toward the upside ever since. In some ways, the bullishness we are seeing here at the end of the week is further resolution of that oversold market condition.
IPG Photonics Corporation ( IPGP | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 1.91
What does this mean for swing traders? Swing traders who buy on weakness and sell into strength should have been accumulating shares earlier in the week as the markets softened - particularly on Monday and Tuesday - and became increasingly oversold. Positions taken then would be among those that traders should be looking to exit today, as Friday's strength so far is providing some excellent profit-taking opportunities.
Bio-Rad Laboratories Inc. ( BIO | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 1.57
Those swing traders who did not pick up shares at the beginning of the week would probably be best served by not chasing stocks as they move higher. Indeed, many of the stocks that were rated 9 or 10 before the opening bell have moved sharply higher and are no longer quite the oversold bargains they were days ago. Instead, swing traders should sit back and wait for the oversold/overbought cycle to play itself out. Being a swing trader means, in part, playing the swings. Presently, this means allowing stocks to reach overbought extremes and then pullback, when new opportunities to the upside will inevitably emerge.
Stec Inc. ( STEC | Quote | Chart | News | PowerRating) Short Term PowerRating 8. RSI(2): 6.85
Of the stocks in today's report, three have Short Term PowerRatings of 9 and two have Short Term PowerRatings 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 time frame.
OSI Systems Inc. ( OSIS | Quote | Chart | News | PowerRating) Short Term PowerRating 8. RSI(2): 6.97
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David Penn is Editor-in-Chief at TradingMarkets.com.
