How to Use the New Stock Indicators with PowerRatings
Today’s
PowerRatings article will look at how to combine our new Stocks Down 10% or
More list with PowerRatings to maximize our edge in the markets.Â
Click here to go to our new indicators page.
These are stocks that have lost 10% or more over the past five
days and are trading above their 200-day moving average. Our research
shows that stocks trading above their 200-day moving average that have lost 10%
or more over the past five days have shown positive returns, on average, 1-day,
2-days and 1-week later. Historically, these stocks have provided
traders with a significant edge. To learn more about our research into stocks
that have that have lost 10% or more over the past five days, and how to use
this information,
click here.
Let’s take a look at the Stocks Down 10% or More
from the close of 2/05/2007:
Here are some individual charts of some of the
stocks listed above:
Under Armour
(
UA |
Quote |
Chart |
News |
PowerRating)
From the list above we can see that UA had a PowerRating of 7 on
2/06/07. The high PowerRating combined with being down 10% or more in the
last five sessions made UA a strong buy on 2/06/07. Over the next 3
sessions, UA has gained 4.2%.
8X8 Inc.
(
EGHT |
Quote |
Chart |
News |
PowerRating)
Combining PowerRatings with our new indicator can also be used
with low priced stocks. EGHT had a PowerRating of 8 on 2/06/07 and also
had moved lower by 10% over that week. A purchase of EGHT on 2/06/07 would
have returned 5.6% over the next 3 sessions.
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.
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.
PowerRatings provides an easy and powerful way
to find trading candidates.
Attend a free class on how to use
PowerRatings, presented by Steve Primo, our Director of Education.
Darren Wong
Associate Editor
Would you like to receive PowerRatings for full month for free? Send us your
PowerRatings strategy and if we accept it for publication, you will receive one
free month of unlimited access to PowerRatings. If you are already a monthly or
annual PowerRatings subscriber, you will receive an additional three months if
we publish your strategy.
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