4 Short-Term Picks With Technical Buy Signals
Epsilon | Jul 16, 2012 06:46PM ET
When it comes to short term trading, a strategy in which I hold positions for no more than a couple weeks, I rely heavily on technical analysis.
I often look to find value in equities that are trading near support, show signs of future, positive price momentum, and offer stable or strong volume, and up-turning stochastic and MACD indicators. Stocks with strong company fundamentals, though not a necessity for my short term trades, are certainly favored.
Below are four equities that are trading near relative support and show potential, positive price momentum:
1. MGM Resorts International (MGM) is trading just above strong support at $9.50, a level the stock has not been below for more than a week since August, 2009. Fundamentally the company is strong and produces very good returns with its 50.31% return on equity (ROE). The company also appears somewhat undervalued as it is currently trading for less than book with a 0.82 price to book (P/B) ratio.
Stochastic and MACD on both daily and weekly charts are beginning to turn upward, adding evidence of a potential bounce off of support at $9.50.
Below is a three month look at recent price movement on daily charts. As mentioned, price, stochastic, and MACD appear to be consolidating near the $9.50 support level and look to be ready to begin a short term trend reversal to the upside.
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