Swing Trading: End of Week Selling Returns Markets to Deeply Oversold Territory


Stocks sold off aggressively into the close on Friday, setting up severely oversold conditions when trading begins on Monday. Leading markets lower were stocks like Hewlett-Packard (more on HP below), which has been trading below its 200-day moving average since late February and fell more than 20% on Friday.

Here are 7 Stocks You Need to Know for Monday

Three stocks - Caterpillar Inc (CAT | PowerRating ) , International Business Machines Corporation (IBM | PowerRating ) and Hewlett-Packard Co (HPQ | PowerRating ) - were largely responsible for dragging the Dow industrials to a loss of more than 170 points on the final trading day of the week.

Shares of CAT closed lower for a fourth consecutive trading day on Friday, while shares of IBM have pulled back for three out of the past four. But the big selling was in HPQ, which fell by more than 20% to reach new lows below the 200-day moving average.

While much attention is focused on weakness in the banks, a broad number of energy stocks have continued to sell-off. In addition to those energy stocks noted in yesterday's 7 Stocks You Need to Know , shares of Baker Hughes Inc (BHI | PowerRating ) sold off by nearly 6%, while National Oilwell Varco Inc (NOV | PowerRating ) dropped by 4%.

Whats's up on a down day? Shares of Mcdonalds Corp (MCD | PowerRating ) gained well over 1% to lead the S&P 100. The stock has not traded in technically oversold territory since the beginning of the month.

Also up more than 1% after a three-day pullback were shares of Biogen Idec Inc (BIIB | PowerRating ) . The stock is among the few in the Nasdaq 100 to remain above its 200-day moving average during the current downturn in the markets.

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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: BHI , CAT , HPQ , IBM , MCD

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