How to use PowerRatings with the Implosion 10 Technology list
TradingMarkets
Indicators
page is designed to help with your daily research, formulate trading strategies,
learn about the market and generally improve your trading knowledge. It contains
a list of “Today’s Top Stocks” broken down into a number of different categories.
Today’s
PowerRatings article is going to focus on combining
TradingMarkets
Implosion 10 Technology Stocks with PowerRatings.
These are the 10 weakest technology stocks (from a universe of hundreds of
technology issues including medical technology, biotechnology, etc) over the
past few weeks, as measured by our proprietary relative strength model. They
recently have under-performed approximately 98% of all other technology stocks.
Ranked 1 through 10 (starting with the weakest), these stocks will most interest
momentum traders, short sellers and bottom fishers.
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.
Looking at the list of candidates for 06/23/06, 1 out of the 10 does not qualify
for a PowerRating. Of the remaining 9 stocks, all have PowerRatings
between 5 and 7. This information suggests that despite the recent bounce in the
market it’s not yet time to short these stocks. Hopefully by combining these two
tools you can fine-tune your entries and exits.
Reminder: We are in no way recommending the purchase or short sale of these
stocks. 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.
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
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