In my last
5 Stocks for the Next 5 Days
column, we looked at a number of stocks that had become overbought
below the 200-day moving average. Historically speaking, these are
stocks that have tended to underperform in the near term. As such,
they are best avoided or, potentially, sold short.
All five of the stocks from the last column began selling off
the day after the column was posted. Shares of
Titanium Metals Corp New
) fell for four days, losing more than 10%.
Children's Place Rtl Str
Digital River Inc
) dropped for three days in a row, falling by more than 7% and 5%,
VeriFone Holdings Inc
Lockheed Martin Corp
) also gave up ground in two-day retreats.
This is another example of why the research suggests that
traders should be wary of stocks that close higher for day after
day below the 200-day moving average. When profit-taking and
renewed selling strike these stocks, the reactions can be
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Here are 5 Stocks for the Next 5 Days
Many of the stocks that are pulling back to new lows or trading
near oversold territory above the 200-day moving average are
utilities stocks. This includes stocks like
Consolidated Edison Inc
Southern Company The
) . Shares of ED have closed lower for four consecutive trading
days, dropping by more than 2% and ending the Wednesday session at
new, 7-day closing lows.
SO has also closed lower for four trading days in a row as it
retreats to new, 7-day closing lows above the 200-day. Shares of
the stock pulled back by a little over 1% ahead of trading on
Closing in oversold territory above the 200-day moving average,
Costco Wholesale Corp
) pulled back by well over 1% ahead of trading on Thursday.
Wednesday's pullback takes COST to new, 7-day closing lows, as
) pulled back for the third session out of the past four trading
days on Wednesday. The stock is still technically in neutral
territory, but could find itself in oversold territory above the
200-day moving average if sellers remain on the offensive over the
balance of the week.
Up two days in a row, shares of
Ford Motor Co
) are closing in overbought territory below the 200-day moving
average ahead of trading on Thursday. F gained well over 4% in
Wednesday's session and has been trading below its 200-day moving
average since late May.
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is Editor in Chief of TradingMarkets.com