TradingMarkets 7 Stocks You Need to Know for Wednesday

Here are 7 stocks for traders for Wednesday:

AAR Corporation (AIR | Quote | Chart | News | PowerRating) reports earnings Wednesday morning, with analysts looking for $0.41 EPS.

When Acergy (ACGY | Quote | Chart | News | PowerRating) announces quarterly earnings on Wednesday before the bell, watch for $0.31 EPS.

Wolverine World Wide (WWW | Quote | Chart | News | PowerRating) should announce $0.28 EPS before the market opens on Wednesday morning.

When Genentech (DNA | Quote | Chart | News | PowerRating) announces earnings on Wednesday afternoon, analysts will be looking for $0.71 EPS.

Analysts are watching for Ruby Tuesday (RT | Quote | Chart | News | PowerRating) to report $0.47 EPS on Wednesday after the bell.

Chaparral Steel (CHAP | Quote | Chart | News | PowerRating) and YUM! Brands (YUM | Quote | Chart | News | PowerRating) both report after the close on Wednesday, so watch for heightened price action and volatility ahead of the bell.

John Lee
Associate Editor
johnl@tradingmarkets.com

Each day, TradingMarkets will be giving free open access to one of our stock indicator lists. The stocks on these lists all have historically backed data (covering over 7 million trades) to quantify their trading edge. Click here for today's free list of 2-Period RSI Above 98.

How to Systematically Trade a Fear-Driven Market

During the recent market selloff which began with the largest one-day drop in more than four years, Raptor II continued to make new equity highs. That's because the Raptor II trading system is designed to capitalize on extreme oversold conditions in individual stocks. So while most "experts" and the media were warning of a market meltdown, leading investors to sell stocks at precisely the wrong time, Raptor II was building a list of potential buy candidates. What followed was a typical "mean reversion" bounce that took our own trading account to new highs over the next few days. The market proved yet again that opinions are no match for statistics.

What is Raptor II?

Raptor II has been one of our best-selling trading systems. One good reason for this is that it has achieved the highest gains per winning trade of any strategy we have published to date. Raptor II identifies deeply oversold, usually event driven, mis-pricings in individual stocks. It does this by waiting for stocks to drop substantially, then triggering an entry signal once the sellers have been washed out, and the professionals move in.

This type of market action has existed for many decades, but until Raptor II, no one to our knowledge has developed a method to trade these moves in a systematic way. Raptor II uses a well-defined set-up to identify entries. And it also uses a well-defined set-up telling you when to exit. While there have been different systems that have traded oversold conditions, we do not believe that any of them have had the test trade results that Raptor II has.

Historically, going back to 1995, 75% of trades have been profitable, showing an average gain per winning trade of greater than 11% (based on simulated results*).

How to Trade Raptor II

There are three different ways Raptor II can be traded: as individual stocks, on a portfolio basis, or with options. The choice is up to you, so that you can select the style that best suits your own trading methodology.

Individual Stocks

• Decide for yourself how many stocks you want to trade
• Decide for yourself how many shares you want to trade
• Use a different exit strategy
• Apply your own money management/position sizing techniques

Structured Portfolio

• A balanced portfolio allows you to control your risk
• The benchmark 10-slot portfolio:
  • Divide your account into 10 slots ($50,000/10 = $5000.00)
  • When a trade is initiated, it occupies 1 slot ($5000.00)
  • With the benchmark Portfolio you should never have more than 10 open positions

Trading with Options

• Long Call Options -- basic way to use options w/ Raptor II
• Front Month -- Average trade lasts 5 Days
• Out Of The Money Strike Price (potentially the biggest gains)
• Deep In The Money Strike Price (high premiums)

To learn more about Raptor II, click here.