Could Your Stocks Rally in the Next Few Days? Find Out with PowerRatings
TradingMarkets offers a proprietary stock rating method called
PowerRatings. This method ranks stocks 1-10 and the higher the rating, the
greater the one-week historical gain has been.
PowerRatings were created by Cesar Alvarez, Director of Research for Connors
Research. To validate PowerRatings performance, more than 8.5 million daily
trades were looked at from Jan. 1, 1995 to September 30, 2006 — over 10 years
worth of data. The results are based on the average 5-day performance.
Some interesting facts jump out from the performance table below. The first one
being that stocks with PowerRatings of 7-10 have, on average, outperformed the
S&P 500; and when you look at the stocks with PowerRatings of 9 and 10, they
have outperformed by a substantial margin. Looking at the other end of the
performance table reveals that stocks with PowerRatings of 1 and 2 have, on
average, underperformed the S&P 500 over the next 5-days.
Here is a simulated average performance for over 3,000 big-cap, mid-cap, and
small-cap stocks — applying PowerRatings over 5 trading days:
| PowerRatings | Performance |
| 10 | 14.7 times better than the S&P 500 |
| 9 | 10.1 times better than the S&P 500 |
| 8 | 5.8 times better than the S&P 500 |
| 7 | 2.9 times better than the S&P 500 |
| 6 | 1.5 times better than the S&P 500 |
| 5 | 1.1 times better than the S&P 500 |
| 4 | 1.3 times better than the S&P 500 |
| 3 | matched the S&P 500 |
| 2 | 0.5 times worse than the S&P 500 |
| 1 | 5 times worse than the S&P 500 |
How to Use PowerRatings
So now that you know what PowerRatings are, the obvious
question is “How do I use them?” Ideally, stocks rated 9 and 10 are potential
buy candidates, and stocks rated 1 and 2 should be avoided. For more information
read the PowerRatings
Strategy Guide.
There are numerous ways you can use PowerRatings in trading. To get started
TradingMarkets has published a strategy guide and since the launch of
PowerRatings numerous daily strategy articles have been written. Possibly the
most useful feature of PowerRatings is that they can be used in conjunction with
almost any trading strategy you employ, allowing you to combine a discretionary
form of trading with quantified research.
All of this information can be accessed for free, however, subscribers will also
be able to use a number of additional features:
- PowerRatings
Preferred List - Top 25 PowerRatings Stocks
- Top 25 Tech Stocks
- Top 10 Low-Priced Stocks
- Stocks To Avoid
- Biggest PowerRatings Up Changes
- Biggest PowerRatings Down Changes
- PowerRatings for all the S&P 500, NASDAQ 100 and Dow 30
- PowerRatings for ETFs
And many more…
Advanced traders will be interested in our latest research into how to trade
PowerRatings:
Two Simple Rules to Trade PowerRatings
Plus, we recently added PowerRatings
Heat
Maps and Intraday PowerRatings. Both of these powerful tools are free
with your PowerRatings subscription.
We’re sure that once you start using PowerRatings you’ll be as excited by them
as we are, whether you use them as a stand alone product, along with other
TradingMarkets methodologies or combine them with your own strategies to make
them even more powerful.
And if you’re interested in trading PowerRatings systematically, our
PowerRatings
Portfolios has achieved simulated average returns of up to 93.57% per
year since 1995.
Click here to take
a free trial of PowerRatings
You can also
attend a free
class on how to use PowerRatings presented by Steve Primo, our Director
of Education.