How aggressive traders can use PowerRatings

Today’s article looks at how to combine

PowerRatings
with the TradingMarkets

Trading Where The Action Is
list.

Created nightly, this list contains the most volatile stocks over the past 50
trading days. These stocks are only for the most aggressive traders who are
willing to assume a high degree of risk in order to capture larger gains. To
find out what kinds of opportunities you can identify through this list,

click here
.

The list of 15 candidates for 07/11/06 contains 1 stock that doesn’t qualify for
a
PowerRating. 5 out of the remaining 14 have high PowerRatings (7-10), making
them possible buy candidates, while only 1 has a low PowerRating, making it a
possible short.

Of the 5 potential buy candidates, 2 have PowerRatings of 8.

Daktronics
(
DAKT |
Quote |
Chart |
News |
PowerRating)

j2 Global Communications
(
JCOM |
Quote |
Chart |
News |
PowerRating)

From 1995-2005, stocks rated 7 have outperformed the S&P 500 by a better than
4-1 margin over a five-day period. Stocks rated 8 have outperformed the S&P 500
by a better than 8-1 margin; stocks rated 9 have outperformed the S&P 500 by a
13-1 margin, and those stocks that have achieved a 10

PowerRating have
outperformed the S&P 500 by a 16.9-1 margin.

Over the same test period (1995-2005), stocks with a PowerRating of 1, 2 or 3 have underperformed the
S&P 500 over the next five-days. The 1’s have performed 4.9 times worse than the
S&P 500, the 2’s have performed worse than the S&P 500, and the 3’s have only
managed 90% of the S&P 500 performance.

You can
attend a free
class
on how to use

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

Click here
to take a free trial of

PowerRatings
.

Ashton Dorkins

Editor-in-Chief

editor@tradingmarkets.com



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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. Controlling risk through the use of protective stops is critical.