A new way to find great risk/reward trades
One of the great things about
PowerRatings
is that they can be used in so many different ways. Once you
understand the basics, you can combine them with a myriad of trading styles.
Each day I’m going to highlight some of the different ways you can incorporate
PowerRatings
into your existing trading strategies and hopefully teach you a few new ones
along the way. I’ll also show you some of the ways our members are using
PowerRatings
to improve their trading.
In today’s example, let’s take a look at TTM
Technologies
(
TTMI |
Quote |
Chart |
News |
PowerRating).
TTMI combines a few of the techniques we’ve been
looking at over the past two weeks. The stock had been trading sideways for more
than a month and appeared to be forming a double top (a very popular trading
pattern). However, there were a number of reasons suggesting the pattern would
not have a negative outcome.
Firstly, the lower part of the pattern was very
close to the high formed in November (blue dashed line), making it an area of
support. Secondly, the 50-day MA was just below, another area of support (read
yesterday’s article for more on combining
PowerRatings
with moving averages). And finally, as the stock hit the bottom of its’ range,
on 2/06 it recorded a
PowerRating
of 7.
This made TTMI a great risk/reward trade. You
could buy the stock with multiple layers of support just beneath your entry
price, allowing you to use a tight stop.
As you can see, two days later TTMI recorded its’
biggest gain in more than 3-months and the 5-day return was over 21%.
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.
New!
Click here to learn how to trade
PowerRatings
in a simple, systematic way.
Ashton Dorkins
Editor-in-Chief