A Simple Way to Increase Your PowerRatings Edge
Today’s
PowerRatings article will look at how to combine multiple indicators along
with PowerRatings to maximize your historical edge.
On the close of March 14, 2007, Diamond Management &
Technology Consultants
(
DTPI |
Quote |
Chart |
News |
PowerRating) showed up on our Laps Down 5% or More
List. Concurrently, it also showed up on our 2-Period RSI below 2 list AND
had a PowerRating of 9. Stocks that fall onto these lists have
shown positive returns, on average, over the next 1-day, 2-days, and 1-week
later.
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DTPI had lapped down 21% from the previous
session’s close. Also from point 1 on the chart below, DTPI’s 2-period RSI
was at 0.61, showing that selling may be overdone. Also at point 2, DTPI
had a PowerRating of 9, which has outperformed the S&P 500 by a margin of 10.1
to 1 over the next 5 trading sessions.
Here is the Laps Down 5% or More list from the
close of 3/14/07:
All these signals made DTPI a strong buy at the
open of 3/15/07 (blue arrow). Selling after 5 sessions would have yielded
a positive return of 6.1%. From this example we can clearly see that
waiting for multiple indicators to line up can work greatly in our favor.Â
Diamond Management & Technology Consultants
(
DTPI |
Quote |
Chart |
News |
PowerRating)
Obviously, results
like these do not occur every time,
but our quantified research clearly shows that the edges exist during extreme
oversold or overbought conditions.
If you would like to attend a free class which covers this
research and strategy further, please
click here
for the calendar of the upcoming online classes. Topics
covered include our latest research on
entries and exits, and
how to use PowerRatings with our new
Preferred Stock List.
Click
here
to activate a free 7-day trial to PowerRatings. You’ll have full access to the
highest PowerRatings stocks which have historically beat the market by better
than 12 to 1. If you have any questions about PowerRatings or the new Stock
Indicators please feel free to email us or call 213-955-5858 ext 1.
Darren Wong
Associate Editor
Reminder: We are in no way recommending the purchase or short sale of these
stocks. This article is intended for education purposes only. Trading should be based on your own understanding of market conditions,
price patterns and risk; our information is designed to contribute to your
understanding.
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