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Monday, August 16, 2010
AVOID THESE STOCKS
From 1995-2005, stocks with a PowerRating of 1, 2 or 3 have underperformed the S&P 500 over the next five-days. The 1's have performed 4.9 times worse than the S&P 500, the 2's have performed worse than the S&P 500, and the 3's have only managed 90% of the S&P 500 performance. Looking at the numbers it makes sense to avoid these stocks, at the very least. But, for aggressive traders this creates a list of potential short sale candidates. Here is a selection of stocks with a PowerRating 3 or lower on 03/18/06: Symbol PowerRating % Gain NYMX 1 -16.14 SSYS 2 -6.01 GNBT 1 -11.11 ENCY 3 -52.48 NVAX 1 -9.51 HEB 3 -13.44 LEXG 2 -7.45 KG] 3 -11.69 SOLD 2 -7.00 PUK 3 -8.67 Over the same five-day period the S&P 500 performance was -0.27%. As you can see from the table above, it makes sense to avoid stocks with low PowerRatings. It also shows that selling short stocks with low PowerRatings can be a profitable strategy too.Go to http://www.PowerRatings.net. Editor-in-Chief editor@tradingmarkets.com The Successful Investor: What 80 Million People Need to Know to Invest Profitably and Avoid Big Losses
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