Is it time to buy tech stocks? PowerRatings can help you decide
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 ten stocks that have
PowerRatings
of 7 or higher. 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 87 out of the 100 stocks are neutral to slightly bullish — 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
5, which means its likely to match the S&P 500 performance over the next 5 days.
So despite the recent selloff in the market, these lists indicate it’s not yet
time to to start buying and that it also looks too late to start short
selling.
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You can
attend a free
class on how to use
PowerRatings,
presented by Steve Primo, our Director of Education.
Ashton Dorkins
Editor-in-Chief
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