Part 3 will focus on #2 below.. Oversold stocks.
- Find sectors/stocks overbought
- Find sectors/stocks oversold
- Find sectors with strong momentum on Friday and look for continuation
- Find stocks technically setup for moves.
Now let’s take a look at stocks that are oversold (#2). Generally speaking, the entire market is tilting towards oversold, but there are a few stocks that have left their bullish pattern or clearly oversold. If the market turns up this week, some of these may offer some good moves. I’m currently a little bearish and will approach these with caution.
CRUS – Not technically oversold, but close to it and more importantly, has dropped out of upward trend on volume. There is support at $16 and I expect that CRUS will move back up with the market and hold current levels.
NRG – UGLY fall on heavy volume. Currently sitting on trendline support and will need some love to reverse.
All airlines – check out this group. The sell-off has been quite strong. AMR, LCC, DAL, ALK, JBLU. Speaking of ALK… it has been one of the strongest in the group and worth a look if it pulls back to SMA100.
Oil and Gas has been hurt, too. KOG, NOG, WRES (WRES looks pretty good here), AEZ, AXAS, CPE, EGY.
PMC – lots of downgrades. May not be much going on here, but I’ll watch for possible bounces.
ESI – Education services have really taken a hit lately and very oversold. I know some of you are watching COCO, as well.
As you know, banks are in the toilet. I’ll keep an eye on this.. more discussion on this later this week in another blog.