Forex

While much of the trading world was no doubt celebrating the strong rally in stocks on what used to be called "turnaround Tuesday," I have to admit my attention was focused elsewhere: the Top 25 Stocks page of our Short Term PowerRatings.Why? Because consulting this page just 90-minutes after the market closed, I saw 14 10-rated stocks. Fourteen. To say that this many 10-rated stocks is a rare event is an understatement. Few things suggest opportunity more strongly than a Short Term PowerRatings Top 25 Stocks listing that features the number of 10-rated stocks in the double digits.

Why "opportunity"? Stocks with Short Term PowerRatings of 10 were the best performing stocks in our 12-year study of short term stock price behavior. We looked at millions of simulated short term trades between 1995 and 2007, factoring in aspects of volume, trend, volatility and momentum. That research revealed that the best-performing stocks--stocks that earned a PowerRating of 10--outperformed the average stock by a margin of nearly 17-to-1 after five days.

Here are five stocks with many of the same characteristics as our best-performing, top 10 stocks. All five of these stocks have Short Term PowerRatings of 9, which means that all five belong to the group of stocks that have beaten the average stock by more than 13-to-1 after five days in our historic testing. While not as overwhelming as the top 10 stocks, it's still a significant enough margin over the past 12 years to potentially give short term traders a true edge when it comes to buying weakness and selling strength.

Also, note that all five stocks have dollar prices of less than $15. Note in particular Metalico, Vaalco Energy and Credo Petroleum, all of which have 2-period Relative Strength Indexes of less than 3. Credo's 2-period RSI is especially low, indicating a truly oversold condition in the stock.


Royale Energy (nasdaq: ROYL - news - people ) Short Term PowerRating 9. RSI(2): 8.61

OMNI Energy Services (nasdaq: OMNI - news - people ) Short Term PowerRating 9. RSI(2): 6.06

Metalico (amex: MEA - news - people ) Short Term PowerRating 9. RSI(2): 2.20

Vaalco Energy (nyse: EGY - news - people ) Short Term PowerRating 9. RSI(2): 1.57

Credo Petroleum (nasdaq: CRED - news - people ) Short Term PowerRating 9. RSI(2): 0.598