Here’s How To Trade Tech Stocks With PowerRatings
In today’s
PowerRatings
strategy we’re going to take a look at how you can use PowerRatings
to trade tech stocks. Technology stocks remain a favorite among investors due to
their high beta. Add
that to the fact that when the NASDAQ outperforms the S&P 500 it is positive for
the market overall and it’s easy to see why tech stocks are so popular.
TradingMarkets publishes two lists every day that can help you find the best
tech stocks to trade. The first list is the
NASDAQ 100 PowerRatings, which contains all the constituents of the NASDAQ
100, and the second list is the
Top 25 PowerRatings Tech Stocks.
The Top 25 list will often contain more volatile stocks because it is drawn from
a wider list of candidates (NASDAQ and NYSE). That makes this list an ideal
place to start if you like trading more speculative issues.
The NASDAQ 100 PowerRatings list can be used as a
proxy indicator for the NASDAQ 100 index. You can determine if the index itself
is overbought/oversold by looking at the number stocks with high/low
PowerRatings. For example, there is only one stock with a PowerRating of 8 and
three with PowerRatings of 7 (no 9’s or 10’s). This means there are very few
good buying opportunities in the NASDAQ 100. At the same time there are only
three stocks with a PowerRating of 3 (no 1’s or 2’s), indicating there are very
few stocks to avoid or sell short.
That means 93 out of the 100 stocks are neutral — suggesting the market is
unlikely to make a strong move until the PowerRatings move in one direction or
the other. A quick way of confirming this is to check the PowerRating for the
NASDAQ 100 tracking stock
(
QQQQ |
Quote |
Chart |
News |
PowerRating). QQQQ has a PowerRating of 6, suggesting a
very slight upwards bias versus the S&P 500 over the next 5 days, but nothing
that would indicate it’s time to take a long position yet.
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.
Ashton Dorkins
Editor-in-Chief