Buying the Vote, Selling the Verdict: 5 Stocks for Swing Traders

Stocks ended the week on a decidedly negative note, losing what were impressive midday gains to finish significantly off their highs and in the red for the session.

It’s hard to imagine a more disheartening scenario: just as the House of Representatives is dragged, kicking and screaming, into signing off on the controversial, multi-hundred billion dollar financial bailout package, the markets, which had been virtually soaring in the hours leading up to the vote, began to run out of steam, stop, and then – to the horror of many observers – begin to reverse and fall back.

After being up more than 300 points, the Dow industrials finished down on the day.

From a traditional technical perspective, both the Dow and the S&P 500 are tap-dancing on support lines that do not look especially likely to hold. However, as traders who focus on buying and selling first and traditional technical analysis second (or even third), we know that we have an exceptionally oversold market, and one that will begin to attract buyers at the same time that many traditional technicians are thinking about becoming sellers.

One guide to opportunity that I have mentioned before is our Top 25 PowerRatings stocks roster, which we published every day after the close at TradingMarkets.com. When I see that the roster looks as it did as of Friday’s close: with five top-rated stocks with Short Term PowerRatings of 10 and the other 20 stocks all having Short Term PowerRatings of 9, then I know that the edges are turning in the favor of buyers of weakness, not in favor of those chasing stocks still lower.

Fuel Systems Solutions (FSYS | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 6.02

La-Z-Boy Inc. (LZB | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 1.14

Tractor Supply Company (TSCO | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 1.02

Private Bancorp Inc. (PVTB | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 11.44

Hawaiian Holdings Inc. (HA | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 4.08

The five stocks in today’s report all have Short Term PowerRatings of 9. As such, these stocks belong to that category of stock which, according to our research, has outperformed the average stock by a margin of more than 13 to 1 after five days. These are the kind of stocks that are most likely to respond swiftly – and strongly – to any resumption of buying pressure as the final sellers are washed out.

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.