PowerRatings Points to High Probability Potential Trades in ETFs
PowerRatings can be used as a stand-alone trading strategy or it be combined with other indicators to find potential buys. On the PowerRatings web site, traders will find several lists with the highest rated stocks, ETFs and leveraged ETFs. These symbols could be used to create a watch list for potential buy signals.
PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter trades on stocks with a PowerRatings of 8 or higher with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
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While PowerRatings could provide all of the information needed for a successful trading strategy, this indicator can also be combined with other buy setups, such as ConnorsRSI or the 2-period RSI, to increase the odds of success.
Heading into Monday’s trading we have potential buy signals in four leveraged ETFs with PowerRatings greater than 8.
Additional research can be done on these ETFs at Trading Market Analytics where a number of hard to find indicators are maintained and updated throughout the trading day. Below, we can see at a glance that FAZ is oversold on ConnorsRSI and the 2-period RSI with readings below 20. These additional signals reinforce the PowerRatings buy setup.
In the past, buying stocks with a rating of 9 on a 3% pullback the next day and selling five days later has been profitable 75% of the time. The average winner has gained 4.3%. Other entries and exits also show high winning percentages and large average gains.
All data is as of the end of day on 3/7/2014.