Oversold continues to become more oversold, as the major markets move deeper and deeper into oversold territory.
Interestingly enough, the fact that the declines have been so gradual has helped keep any of the major ETF market proxies, the S&P 500’s SPY ( SPY | Quote | Chart | News | PowerRating), the Dow industrials DIA ( DIA | Quote | Chart | News | PowerRating) or the Nasdaq 100’s QQQQ ( QQQQ | Quote | Chart | News | PowerRating) from developing the sort of high Short Term PowerRatings that signal a market that has reached truly oversold extremes.
It is those markets that have become extremely oversold that are the ones worth buying into. These are the markets for stocks and exchange-traded funds that our research indicates are most likely to outperform the average stock or ETF in the short term and are our primary focus on short term stock and ETF traders.
Right now, however oversold stocks are, our Short Term PowerRatings are warning us that the edges have not yet developed. The SPY, DIA, QQQQ â€" even the Russell 2000 ETF of small cap stocks, IWM â€" all have neutral Short Term PowerRatings of 6.
Nevertheless, there are a number of high Short Term PowerRatings stocks that traders might want to keep an eye on â€" especially if we see any early or dramatic weakness that reveals potential panic selling. All of the stocks in today’s report have Short Term PowerRating of 9, and belong to that cohort of stocks that have outperformed the average stock by a margin of more than 13 to 1 after five days.
Open Text Corporation ( OTEX | Quote | Chart | News | PowerRating) Short Term PowerRatings 9. RSI(2): 8.66
InterMune Inc. ( ITMN | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 7.24
Apollo Group Inc. ( APOL | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 4.32
The more conservative approach would be to wait for higher Short Term PowerRatings in the SPY, DIA, QQQQ or IWM before looking to take long positions in stocks. However for those most aggressive, short term trades using limit orders below the previous low of high Short Term PowerRatings stocks is one trading strategy that has proven results for short term traders.
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.
