Stocks

5 Stocks for the Next 5 Days: Oversold Gold and Soaring Semiconductors

Over the next 5 days, swing traders may want to include both gold stocks and semiconductor stocks on their trading watch lists. With oversold conditions growing in the former and overbought conditions becoming the norm in the latter, there may be a real potential for opportunities for short term traders in the near term.

Let's start with gold stocks. The Market Vectors Gold Miners ETF ( GDX ) has closed lower for a third day in a row above the 200-day moving average, with two of those closes in oversold territory.

Looking deeper we can see stocks like Kinross Gold Corp ( KGC ) and Goldcorp Inc ( GG ) leading the sector lower. Both stocks have closed lower for three days in a row, are trading above the 200-day, and have finished in or near oversold territory ahead of trading on Wednesday.

With the gold stocks becoming increasingly oversold, it is the semiconductor stocks that have been gaining ground below the 200-day moving average, closing in overbought territory in many instances.

Micron Technology Inc ( MU ) has been the standard bearer of the sector's recent rally. The stock was up more than 2% on Tuesday, closing higher for a sixth day in a row below the 200-day. Shares of MU have finished in overbought territory for the past four days in a row.

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Also climbing deeper and deeper into overbought territory below the 200-day moving average are shares of Sandisk Corp ( SNDK ) . Shares of SNDK have also closed higher for six days in a row, the most recent four sessions ending in overbought territory.

You can track the semiconductor sector as a whole by way of exchange-traded funds like the HOLDRS Semiconductor ( SMH ) . SMH is also trading below its 200-day and should open on Wednesday having closed in overbought territory for two days in a row.

Here's a PowerRatings special for you PowerRatings traders: In addition to a number of semiconductor stocks that have earned low, "consider avoiding" PowerRatings of 3 or less, shares of retailer Zumiez Inc ( ZUMZ ) have become overbought below the 200-day moving average. The stock has closed higher for three days in a row, reaching overbought levels on Tuesday. ZUMZ earned a one-point PowerRatings downgrade to 2 intraday in Tuesday's session.

*Correction: Market Vectors Gold Miners ETF ( GDX ) had closed lower for two out of three days when the article was originally written.

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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 Nasdaq, Inc.


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

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