Last Thursday we noted that the market was oversold everywhere, and historically when those extremes are reached, the market typically bounces a bit. Â As shown in our updated "Dow 30 Trading Range Screen" below, most stocks have indeed seen a nice bounce off of oversold levels over the last week. Â In the screen, the dot represents where the stock is currently trading, while the tail end represents where it was one week ago. Â As you can see, most dots are to the right of the tails, meaning the stocks have moved higher within their trading ranges.
A lot of stocks remain oversold, though, just much less oversold than they were last week. Â Names like American Express (AXP), General Electric (GE), Coca-Cola (KO), 3M (MMM), Merck (MRK), Travelers (TRV), Wal-Mart (WMT) and Exxon Mobil (XOM) were all in the dark green zone last week, meaning they were more than two standard deviations below their 50-day moving averages. Â Now they have moved up into the light green zone, which is between one and two standard deviations below the 50-day. Â It's nice that these stocks have stabilized a bit, and if you're bullish, they're still trading at levels where they have a long way to go before getting overheated again.
Copyright Š Bespoke Investment Group
