Learn How To Use PowerRatings With The 200-Day MA
For today’s
PowerRatings
strategy, let’s take a look at j2 Global Communications
(
JCOM |
Quote |
Chart |
News |
PowerRating).
JCOM hit a new 52 week high in January then suddenly sold off sharply. The
decline even included a 10% drop in one trading day! Does this decline signal a
major top and trend reversal, or is it just a correction in an ongoing uptrend?
This is a tough question to answer but looking at a long-term chart does yield
some other very useful information.
Over the past few years JCOM has responded very well to its’ 200-day MA. JCOM
has performed very well when it is trading above the 200-MA and struggled to
make any progress while below it. Also, tests of the 200-day MA have been
significant — often providing very good entry points.
So, knowing that the 200-MA provides good support, as it neared that level we
should be looking for a buy signal. And, if you take a look at the RSI you’ll
notice a positive divergence — suggesting the decline is losing momentum. These
indicators coming together are a positive sign, but what if you could add one
final piece to the puzzle? How about being able to add a statistical edge to
your trade? By using
PowerRatings
you can do that. On 02/21/06 JCOM registered a of
PowerRating
8.
In the four days since then JCOM is up almost 10%.
Click here
to take a free trial of
PowerRatings.
You can also
attend a free
class on how to use
PowerRatings
presented by Steve Primo, our Director of Education.
Ashton Dorkins
Editor-in-Chief