5 PowerRatings Stocks for the Next 5 Days: WEN, X, RIMM, HOG, LEN
For the past few days, our Top 25 PowerRatings roster has been filled to the brim with 10-rated stocks. These are the stocks that our research, going back to 1995, has shown to outperform the average stock by a margin of more than 14 to 1. In fact, for the past two days in a row, all 25 of our Top 25 PowerRatings stocks had PowerRatings of 10.
This is a powerful signal for short term traders. For one, this means that there have been a sizable number of stocks that were showing the sort of characteristics that have led to short-term outperformance for more than a decade. But even more broadly, this exceptionally high number of 10-rated stocks was a message to high probability, mean reversion traders that the opportunities for buying oversold stocks put “on sale†by nervous investors were abundant.
Fortunately, although many stocks have taken advantage of the switch from selling to buying, there remain a few stocks with PowerRatings of at least 8, that have yet to attract significant buying pressure. These may be among the high PowerRatings stocks most worth watching as subsequent waves of buyers begin foraging for stocks that were overlooked on Monday, and which may still be oversold and undervalued in the short term.
Wendy’s / Arby’s Group
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PowerRating) has a PowerRating of 8. The stock has pulled back for five days in a row and is at its most oversold levels since the beginning of the month, earning a 2-period RSI of less than 5.
9- rated U.S. Steel
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PowerRating) had closed lower for three days in a row going into Monday’s trading. With a 2-period RSI of less than 10, the weakness in U.S. Steel is reflective of the short-term weakness in a number of commodity-oriented stocks and ETFs.
Research in Motion
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PowerRating) (see chart below) plunged by more than 3% on Monday, maintaining its 9-rating as it moves toward its 200-day moving average. Monday’s selling saw RIMM’s 2-period RSI close below 2, indicating an extremely oversold condition. RIMM shares a PowerRating of 9 with U.S. Steel.
Closing lower for a fourth day in a row was Harley Davidson
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PowerRating) on the first trading day of the week. Buying in the stock was strong enough on Monday to boost HOG up from the 2-period RSI of under 5 from Friday’s close.
Like HOG, shares of Lennar Corporation
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PowerRating) (see chart below) found a few buyers on Monday. But the stock remains under selling pressure having closed lower for seven consecutive trading days going into Monday, and has a 2-period RSI of under 16. Unlike Harley Davidson, which has a PowerRating of 8, Lennar has a PowerRating of 9 as of the Monday close.
Still learning how to trade high PowerRatings stocks? Be sure to read Larry Connors’ PowerRatings primer: How to Find the Best Stocks to Trade Every Day.
Our highest Stock PowerRatings stocks have outperformed the average stock by a margin of more than 14 to 1 after five days. Click here to start your free, 7-day trial to our Stock PowerRatings!
David Penn is Editor in Chief at TradingMarkets.com.