3 Top PowerRatings Tech Stocks for Traders

As stocks slide in the first few hours of trading on Wednesday, the fact that the Nasdaq is leading the markets lower begs the question of whether or not some of the more promising pullbacks might be found inside this tech-heavy market.

Technology stocks have been gainers in the past few days, led by names in the semiconductor industry. However, Tuesday's reversal to the downside - and follow-through lower today on Wednesday - means that additional selling will likely drive these stocks even lower. And while many of the stocks that are driven lower today will continue to move lower tomorrow and beyond, a number of them - particularly those trading above their 200-day moving averages - are likely to attract buyers and find themselves resuming their upward trajectories in the near term.

Today, we feature three such stocks with the potential not just to reverse to the upside, but also to outperform the average stock in doing so. Both Take Two Interactive Software (TTWO | Quote | Chart | News | PowerRating) and STEC Inc. (STEC | Quote | Chart | News | PowerRating) have Short Term PowerRatings of 8, putting them in that category of stock that, according to our research, have outperformed the average stock by a margin of more than 8 to 1 after five days. The third stock in today's report, Maxwell Technologies Inc. (MXWL | Quote | Chart | News | PowerRating) began the day with a Short Term PowerRating of 7. But a lower open appears to have helped boost MXWL's Short Term PowerRating one notch higher to an 8 intraday.

Let's take a closer look at the stocks by way of their PowerRatings charts:

Take-Two Interactive Short Term PowerRating 8. RSI(2): 18.35

Take-Two Interactive's price action has been largely conditioned by the fact that the stock is a takeover target by rival Electronic Arts.

For most of the past several weeks, as TTWO's chart indicates, the stock has traveled in a fairly tight range between $28 and $26. Over the past few days, however, just enough selling has entered the market to bring TTWO down toward the lower end of this range - and boosting the stock's Short Term PowerRating from 5 to 8 over the past several days in the process.

STEC Inc. Short Term PowerRating 8. RSI(2): 5.37

In stark contrast to Take-Two Interactive's tight trading range, shares of STEC have traded as low as $8 and as high as $14 since April.

Like many high Short Term PowerRatings stocks, STEC's most recent pullback came courtesy of a failed breakout to the upside on June 4. This breakout attempt, which was accompanied by a collapse in the stock's Short Term PowerRating to 2 (and, one day later, sliding further to its lowest possible score of 1) fell short at the $14 level. The stock proceeded to drop for six consecutive sessions before buyers of any size stepped in.

Maxwell Technologies Inc. Short Term PowerRating 7. RSI(2): 10.44

As I mentioned above, shares of Maxwell Technologies began the day with a PowerRating of 7, which is a good, but average, rating for a stock. However - and this is unfortunately not visible in the PowerRatings chart below - the stock opened lower on Wednesday and this lower opening is what provided for an intraday upgrade of the stock from a Short Term PowerRating of 7 to a Short Term PowerRating of 8.

Maxwell Technologies has dabbled in the high Short Term PowerRating world before, albeit briefly. For example, MXWL earned an 8-rating on June 3rd and, two days later, the stock was closing more than 80 cents - and 6% - higher. Having made four consecutive down days as of Tuesday's close, it is little surprise to see MXWL's PowerRating back up in the "consider buying" category once again.

Does your stock trading need a tune-up? Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days.

Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today.

David Penn is Senior Editor of TradingMarkets.com.