5 Stocks for the Next 5 Days: Will Traders Sell the News in Google?


Both of the oversold utilities stocks from my last report have since rallied into strength. Consolidated Edison  ( ED ) and Southern Company  ( SO ) alike gained well over 1% just one day after appearing in our 5 Stocks for the Next 5 Days roster, and were up more than 3% three days after we highlighted the stocks last week.

Costco Wholesale  ( COST ) was another oversold stock from last week that has since performed impressively, adding more than 1% in three days.

This week, with stocks beginning to pullback from exceptionally overbought territory, we will focus on some of the more overbought stocks heading into the second half of the week.

Here are 5 Stocks for the Next 5 Days

Up six out of seven trading days heading into the Thursday session, shares of Akamai Technologies  ( AKAM ) have been among the more overbought in a very overbought technology sector. And with strength on Thursday likely to push the stock to new short term highs below the 200-day moving average, traders should be on the lookout for potential profit-taking in the near-term.

The last time shares of AKAM were this overbought was during a 5-day rally in the first half of September. The stock fell for the next four days in a row.

Also returning to overbought territory below the 200-day are shares of Netflix  ( NFLX ). Clearly the beneficiary of aggressive short-covering, NFLX has closed higher for five out of the past seven trading days. And two days of sideways to slightly lower trading heading into Thursday's session has been the pause that refreshes as the stock is up more than 3% midway through trading on Thursday.

Scheduled to announce earnings on Thursday, Google (GOOG) has been on a tear for the past week, finishing higher for eight consecutive trading days and moving toward a test of its 200-day moving average. Shares of GOOG have been trading below their 200-day consistently since early August and have finished the past four trading days in overbought territory.

Also overdue for a pullback - but on the other side of the 200-day moving average - are shares of Amazon.com  (AMZN). The stock, which was en route to new highs midway through trading on Thursday, is up seven in a row and more than 12% since its last oversold close on October 3.

Traders looking for stocks pulling back into oversold territory above the 200-day moving average may want to keep an eye on shares of Green Mountain Coffee Roaster  (GMCR). Shares of GMCR are heading toward a second lower close on Thursday and a return to oversold territory.

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David Penn is Editor in Chief of TradingMarkets.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Stocks

Referenced Stocks: AKAM , COST , ED , NFLX , SO

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