Here’s a New Way of Using the TM Stock Scanner

  • November 6, 2006
  • Darren Wong

Today’s

PowerRatings article will show you a strategy combining the

TradingMarkets Stock Scanner
(if you’re not a member,

sign up for a free trial) and PowerRatings. 

Finding strong stocks is easy with our stock
scanner.  In this example we will look for stocks that have a high 12-month
Relative Strength reading. 
Relative Strength is the relative price performance rank over the last 250
trading days against the 5,000 most actively traded stocks in our database.
Ranks are 1 to 99 with higher numbers representing stronger performance. 
We will scan for stocks with RS (12 month) rankings of 90 or higher.

Here is a what the inputs will look
like:



I have also included other parameters to help
shorten our list of resulting stocks.  I prefer to trade stocks that are between
$20.00 and $30.00 in price.  Also, I look for stocks that have a good
degree of liquidity, so that entries and exits can be made more easily. 
Therefore, I inserted 2500 into the 50-day average volume box (The
volumes are in 100’s, so inputting 2500 means you are looking for volume above
250,000). 

Here is a partial list of the scan
results:


We can then check each resulting stock’s

PowerRatings.  The stocks rated 7 or higher would be put on your watch
list.

From 1995-2005,
stocks with a PowerRating of 8 have outperformed the S&P 500
index on average by an 8.3-to-1 margin, while a PowerRating of 10 doubles that
performance to 16.3.

PowerRatings also help indicate a stock’s
downside as well as timely short-sale entry points; PowerRatings of 1 and 2 have
on average lost money over the next week. A PowerRating of 1 typically
underperformed the S&P 500 by a 5-1 margin. Obviously, you should ideally be
looking to buy high PowerRating stocks and avoid (or short) low PowerRatings
stocks.

You should not consider any of these stocks as
“buy candidates.” Rather they are a starting point in your search for strong
stocks that fit your own strategy’s trading criteria.

Here are a few charts from stocks rated 7 or
higher:

AMR Corp.
(
AMR |
Quote |
Chart |
News |
PowerRating)

Coldwater Creek 
(
CWTR |
Quote |
Chart |
News |
PowerRating)

InterMune Inc.
(
ITMN |
Quote |
Chart |
News |
PowerRating)

Marvel Entertainment
(
MVL |
Quote |
Chart |
News |
PowerRating)

Macrovision Corp.
(
MVSN |
Quote |
Chart |
News |
PowerRating)

Titanium Metals
(
TIE |
Quote |
Chart |
News |
PowerRating)

 

Find tomorrow’s winning stocks today!

Click Here!


Attend a free class on how to use

PowerRatings, presented by Steve Primo, our Director of Education.

Darren Wong

Associate Editor

darrenw@tradingmarkets.com


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strategy.


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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