What's down on an up day?
And not just any "up day", but an "up day" that saw the Nasdaq
rally by more than 3% to close at the highest level since the
beginning of the week.
Now there are plenty of Nasdaq stocks trading lower heading into
trading on Wednesday.
Research In Motion Ltd
) is one. Shares of RIMM were down more than 2%, finishing lower
for a third day in a row.
But because RIMM continues to languish below its
200-day moving average
, the stock is just not suitable for most short-term trading. So
rather than look for just any stock that is down and trading in or
near oversold territory as of Tuesday's close, the real goal is to
find stocks that are pulling back, but doing so in bull market
territory, above the 200-day moving average.
The 200-day moving average filter potentially eliminates a wide
variety of stocks from consideration as potential trading
opportunities. But in exchange, traders and investors are typically
dealing with stocks that are in longer-term bull markets and more
likely to respond both positively and strongly after short-term
Our focus thus limited, the few Nasdaq stocks that are pulling
levels above the 200-day moving average include stocks like
) , a biotechnology firm that has finished lower for six out of the
past seven trading days. Even more oversold are shares of fellow
health care sector stock
) . Shares of ABMD have closed lower for seven days in a row, the
past three in oversold territory.
Note that both INHX and ABMD have earned some of our highest,
short-term "consider buying" ratings out of all the stocks in our
Also moving lower in bull market territory ahead of Wednesday's
trading are shares of
Sanderson Farms Inc
) . Although the stock has a neutral rating as of end of trading on
Tuesday, SAFM finished lower by more than 3%, closing lower for a
second day in a row above the 200-day. Any significant selling in
SAFM over the next day or two will almost certainly take SAFM into
All of the stocks in today's report were available from
research and data available through PowerRatings. To learn more,
is Editor in Chief of TradingMarkets.com