Stock Market Shake 'n' Bake: 5 Top Stocks for Swing Traders

Stocks ended a volatile session on Wednesday lower, after a coordinated decision by central bankers in the U.S., Europe and the U.K. to lower interest rates failed to inspire sustained buying.

I’ve mentioned anecdotally how the ratio of 9- and 10-rated stocks to 8-rated stocks in our daily Top 25 PowerRatings stocks roster can help us determine whether or not we should have a bias toward buying or a bias toward selling.

Generally speaking, the higher percentage of 9- and 10-rated stocks in the top 25, the more oversold the market and the greater likelihood that stocks will soon be attractive to buyers. And as of Wednesday’s close, I am seeing the highest ratio of 10-rated stocks – to say nothing of 9-rated stocks – to 8-rated stocks that I’ve seen since the first half of July.

It is worth pointing out that the July was the month when stocks made a short term low after a two-month drop from the May highs. From those July lows, stocks rallied for a month before resuming the decline that continues to this day.

It is impossible to say whether or not a 30-day rally is right around the corner. But our Short Term PowerRatings have been a reliable guide in the past. With the caveats of keeping position sizes modest and only buying the most oversold stocks trading above their 200-day moving averages, we will have some excellent short term edges on our side in the event that buyers do return to stocks – if even for a fortnight or two.

Steven Madden (SHOO | Quote | Chart | News | PowerRating) Short Term PowerRating 10. RSI(2): 0.425
Green Bankshares Inc. (GRNB | Quote | Chart | News | PowerRating) Short Term PowerRating 10. RSI(2): 0.492
Vertex Pharmaceuticals Inc. (VRTX | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 1.11
UST Inc. (UST | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 1.53
Trex Company Inc. (TWP | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 2.69

Of the five stocks in today’s report, all have Short Term PowerRatings of 9. We found that stocks with Short Term PowerRatings of 9 have outperformed the average stock by a margin of more than 13 to 1 after five days.

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.