5 PowerRatings Stocks Under $15 for Swing Traders

Stocks are holding steady, neither up nor down by significant margins in the first few hours of trading on an options expiration Friday.

The markets have been a tug of war between financial stocks and energy stocks, though traders have also turned their attentions to technology and materials stocks, as well. We have had success this week in our subscription service, the TradingMarkets Battle Plan, buying energy stocks on weakness and selling them as they rally.

Volterra Semiconductor (VLTR | Quote | Chart | News | PowerRating) Short Term PowerRating 8. RSI(2): 7.16

We have not participated as vigorously in the rally in financial or technology shares. Why? Because our research into short term stock price behavior tells us that the edge for swing traders looking to buy weakness and sell strength lies in only going long in stocks that are trading above their 200-day moving averages.

Talbots Inc. (TLB | Quote | Chart | News | PowerRating) Short Term PowerRating 8. RSI(2): 8.53

And while many financial stocks have made impressive gains since the lows of mid-July, the vast majority of these stocks are still trading below their 200-day moving averages. However compelling and attractive these rallies are, we know better than to stray from the results of our research going back to 1995.

Overhill Farms Inc. (OFI | Quote | Chart | News | PowerRating) Short Term PowerRating 8. RSI(2): 10.97

In fact, if the market's move higher is not sustained and the bear market resumes, many of the financial stocks that have been moving higher for the past four or five weeks may be among the best candidates for traders looking to sell stocks short.

Momenta Pharmaceuticals Inc. (MNTA | Quote | Chart | News | PowerRating) Short Term PowerRating 8. RSI(2): 8.06

For now, the fact that there is a relatively small number of high Short Term PowerRatings stocks tells us that the plan of action for swing traders right now is patience. Waiting for the market to pull back – or to rally, become overbought, and pull back – rather than chasing stocks is always the best policy for smart, coherent swing trading. Remember, the essence of swing trading is finding the rhythm of the markets – buying when the market creates bargains and selling when prices recover – and trading within it, rather than against it.

Ezcorp Inc. (EZPW | Quote | Chart | News | PowerRating) Short Term PowerRating 8. RSI(2): 29.15

All five of the stocks in today's report have Short Term PowerRatings of 8. Our research into short term stock price behavior since 1995 indicates that stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days.

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 at TradingMarkets.com.