Avoid These Stocks!

From 1995-2005, stocks with a PowerRating of 1, 2 or 3 have underperformed the S&P 500 over the next five-days. The 1's have performed 4.9 times worse than the S&P 500, the 2's have performed worse than the S&P 500, and the 3's have only managed 90% of the S&P 500 performance.

Looking at the numbers it makes sense to avoid these stocks, at the very least. But, for aggressive traders this creates a list of potential short sale candidates.

Here is a selection of stocks with a PowerRating 3 or lower on 03/18/06:

Symbol PowerRating % Gain

NYMX 1 -16.14
SSYS 2 -6.01
GNBT 1 -11.11
ENCY 3 -52.48
NVAX 1 -9.51
HEB 3 -13.44
LEXG 2 -7.45
KG] 3 -11.69
SOLD 2 -7.00
PUK 3 -8.67

Over the same five-day period the S&P 500 performance was -0.27%.

As you can see from the table above, it makes sense to avoid stocks with low PowerRatings. It also shows that selling short stocks with low PowerRatings can be a profitable strategy too.Click here to take a free trial of PowerRatings.You can alsoattend a free class on how to use PowerRatings presented by Steve Primo, our Director of Education.

Editor-in-Chief
editor@tradingmarkets.com

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From TradingMarkets.com.

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