Two Nasdaq 100 Stocks for Traders

Some of the best opportunities for traders looking for stocks that are more likely than the average stock to be higher in a week's time include two of the most popular names in technology.

Even though its price is lower, Apple (AAPL | Quote | Chart | News | PowerRating) is actually less oversold than it was at the beginning of the month. With a Short Term PowerRating of 8, the stock has fallen some 20% from its December highs, yet is still trading above its 200-day moving average.

As the PowerRatings chart of Apple shows, the stock has tended to respond well in recent months when its PowerRating rose to eight or higher. Lower PowerRatings in late November, for example, also helped traders determine when to take profits.

The other top name in the Nasdaq 100 that traders should take a good look at is Research in Motion (RIMM | Quote | Chart | News | PowerRating). Like Apple, Research in Motion has a PowerRating of 8.

Apple Chart:

Research in Motion Chart:

In a few ways, this PowerRatings chart of Research in Motion resembles the PowerRatings chart of Apple. Like Apple, Research in Motion's PowerRatings shifted as the stock moved from pullback in late November, for example, to overextension in mid-December. The stock, also like Apple, is trading above its 200-day moving average, which is another sign of a generally strong stock. A third similarity is the fact that Research in Motion was also more oversold in early January when its price was higher than it today.

The PowerRatings Oscillator below the price chart provides another way of looking at the change in PowerRatings. Notice how the oscillator rises as Research in Motion pulls back and its PowerRating increases.

There were two other stocks with Short-Term PowerRatings of 8 in the Nasdaq 100: Garmin (GRMN | Quote | Chart | News | PowerRating) and EchoStar (DISH | Quote | Chart | News | PowerRating). The only reason I did not feature these two was because while both have PowerRatings of 8, both are also below their 200-day moving average.

Trading stocks that are under their 200-day moving average can be viable when the markets overall are trading above their 200-day moving averages. But the risks rise swiftly when trying to trade these "weak" stocks when the market is also weak and trading below its 200-day moving average. In times like these, when such weakness is broad and pronounced, it is often better to stick with the high PowerRatings stocks that are above their 200-day moving average when it comes to short-term trading. Read Larry Connors's article "Five Mistakes to Avoid in a Market Trading Below its 200-day Moving Average" for more guidelines and instructions on trading these volatile markets. And register for our TradingMarkets Path to Professional Trading course, which is currently addressing the issue of trading large pullbacks. It is a free, informative -- and timely -- lesson for everyone who trades stocks.