Last Week’s Best Performing PowerRatings’ Stock: AMD
Today’s
PowerRatings article looks at the best low PowerRating stock for the past five
days:
Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating)
The chart below shows that AMD had risen for 3 straight sessions
and its PowerRating continued to fall. Then on 10/13/06 AMD had a
PowerRating of 3, suggesting it
was likely to underperform the S&P 500 over the next five days (number 3 on the
chart). Also on 10/16/06, AMD’s PowerRating stayed at 3 offering another
chance to enter a position.
We could also have used the 200-day simple
moving average
to help confirm the trend. We will consider any stock trading below its
200-day simple moving average to be in a downtrend and we look to trade in the
direction of the major trend.
Over the next five days AMD proceeded to fall 20.25%.
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. Obviously, you should ideally be
looking to buy high PowerRating stocks and avoid (or short) low PowerRatings
stocks.
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class on how to use
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presented by Steve Primo, our Director of Education.
Click here to
try
PowerRatings for yourself, risk free.
Darren Wong
Associate Editor
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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.
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