If you are looking for some serious action in a tradable rally, the following three stocks have been popping up on various short squeeze screens that I have saved inside The PPT. Members can click here to see the parameters for the search.
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KIE, the ETF for insurance firms, flashed a technical oversold score by The PPT algorithm on Friday. Going out five to ten trading sessions, the ETF has impressive results for a long trade. Here are the statistics:
5 Day – Avg Return 4.44 5 Day – Times Up 4.00 5 Day – Times Down 1.00 5 Day – # Signals 5.00 5 Day – % Times Up 80.00 7 Day – Avg Return 5.35 7 Day – Times Up 4.00 7 Day – Times Down 1.00 7 Day – # Signals 5.00 7 Day – % Times Up 80.00 10 Day – Avg Return 4.35 10 Day – Times Up 4.00 10 Day – Times Down 1.00 10 Day – # Signals 5.00 10 Day – % Times Up 80.00
Moreover, looking at the zoomed out daily chart above, we can see that KIE is going to the mattresses (click on hyperlink to see that concept previously discussed) in a virtual straight line, approaching a major 2010 support zone.
The top components of KIE are: MET TRV PRU AFL AON.
Note that AFL has been crushed, but it did print a hammer on Friday. It should be on close watch for any upside confirmation for a change in trend this week.
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I alerted 12631 members last evening to the fact that Corinthian Colleges had been registered by The PPT algorithm as having an oversold hybrid score (combination of many technical and fundamental factors). Historically, COCO has had phenomenal results in the following trading sessions after the hybrid oversold reading.
Of course, the for-profit education plays have been severe laggards to the broad market over the past few years. When you combine that glaring underperformance with the omnipresent regulatory risks, it is easy to see why many traders have sworn off these names as simply being untradable.
Much like the solars and LED plays, the for-profits have been drama queen teases. However, putting the taboo to one side is the essence of objectivity, and we know that many of these for-profit education stocks have enormous short positions in them consisting of bears looking to ride these firms down to $0/share. Therefore, it follows that unless the straight-line-to-zero-express has not only left the station but is close to its destination, there are bound to be some excellent trading opportunities on the long side.
Looking at the daily chart of the heavily-shorted COCO, we know by now that the stock has been in a seemingly perpetual downtrend. Recently, a high volume buy spike on the back of perceived easing of regulations showed just how powerful a short squeeze can be in a hated stock and sector. After a low volume pullback the past few days leading to The PPT hybrid oversold score, a close above $4.74 would give back the initiative to the bulls to press the squeeze.
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Tortoise Energy Infrastructure Group (TYG), a closed-end equity mutual fund, has been registered by The PPT as having an oversold technical score. Before I get to the statistics, it is also worth noting that the stock closed clearly below its lower daily Bollinger Band. Now, that fact alone is not a reason to get bullish on an oversold stock. However, when you combine that technical analysis with the data below, you will see that going long TYG is a high probability trade here (I currently have no position). After previous times when TYG registered a technical oversold score by The PPT algorithm, the stock has been consistently higher five, seven, and even ten trading sessions out.
Here are the statistics to support that statement.
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5 Day – Avg Return 3.45 5 Day – Times Up 7.00 5 Day – Times Down 1.00 5 Day – # Signals 8.00 5 Day – % Times Up 87.50 7 Day – Avg Return 3.86 7 Day – Times Up 8.00 7 Day – Times Down 0.00 7 Day – # Signals 8.00 7 Day – % Times Up 100.00 10 Day – Avg Return 3.58 10 Day – Times Up 8.00 10 Day – Times Down 0.00 10 Day – # Signals 8.00 10 Day – % Times Up 100.00
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One of the few times that I have ever seen Woodshedder act in a manner unbecoming of a southern gentleman was roughly two years ago, when he taunted poor Jason Treu in the comments section of his inaugural post that some of his party photos would wind up on the site: “Hot Chicks with Douchebags.” While it appears that the iBankCoin community (circa summer of 2009) deemed it appropriate to tar and feather Mr. Treu in town square, I suggest you all show alpha male Oracle CEO Larry Ellison a tad more respect.
You see, according to The PPT algorithm, ORCL is by far the most impressive stock in terms of June seasonality performance. With a huge data sample of the stock being up 19 out of the past 23 times in June, for a staggering average return of 10.15%, it would behoove you to understand why Mr. Ellison rides around in his yacht, sipping champagne.
Taking a look at the weekly chart for practical application, the bullish June thesis makes sense. We have a steady uptrend that remains intact and has consolidated in the form of a bull flag over the past month. I like Oracle on any strength here.
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I made the following video last evening for members of The 12631 Trading Room inside The PPT service. I will follow up with a post of specific steel charts updated tonight.
The purpose of the video is two-fold:
