PowerRatings Lessons From This Week
Everyday at TradingMarkets we look for new ways to use
PowerRatings,
and each day we write an article sharing a new technique to utilize
PowerRatings
in your trading. Here is a brief recap of this week’s lessons.Â
Click on the article’s title to read the full strategy.
How to use
PowerRatings
with moving averages.
Moving averages are
great points for levels of support and resistance.Â
Because the moving average has such an impact on
stock price, oftentimes a stock will test its moving average before making a
serious move. Traders can use
PowerRatings
hand in hand with moving averages to predict
major price moves. A recent example of a powerful convergence between these two
indicators occurred in Brightpoint
(
CELL |
Quote |
Chart |
News |
PowerRating) when it pulled back to its 20-day
moving average.
How to use
PowerRatings
to find stocks with a good risk/reward range.
(
TTMI |
Quote |
Chart |
News |
PowerRating) combines a few of the techniques
we’ve been looking at over the past two weeks when viewed with
PowerRatings.
The stock had been trading sideways for more than a month and appeared to be
forming a double top (a very popular trading pattern). However, there were a
number of reasons suggesting the pattern would not have a negative outcome.
How to use
PowerRatings
with triangles.
(
KNDL |
Quote |
Chart |
News |
PowerRating) recently formed a symmetrical
triangle. This pattern requires at least two lower highs and two higher lows.
These points are then connected to form a triangle (solid blue lines).Â
Symmetrical triangles are usually continuation patterns, meaning they tend to be
resolved by a breakout in the direction of the previous trend. In this example,
the previous trend wasn’t clear. KNDL had been moving sideways for more than two
months before forming a triangle.
How to use
PowerRatings
in conjunction with RSI readings.
RSI stands for Relative Strength Index and is a
technical analysis oscillator that is very useful in gauging a stock’s price
strength. The formula for RSI calculates price change over a period of days and
gives the stock a rating from 0 to 100. If a stock has an RSI reading over 70,
it is considered overbought, and therefore in line for a sell-off. If a stock
has an RSI reading under 30, it is considered oversold, and therefore ready for
a price move up. Based on historical research, we at TradingMarkets have
discovered a unique approach to utilizing the RSI reading by combining a stock’s
RSI to its
PowerRating.Â
By using both indicators, we strengthen the probability that a move will occur.
How to use
PowerRatings
to trade a media frenzy.
Since announcing disappointing earnings,
(
GOOG |
Quote |
Chart |
News |
PowerRating)
has been freefalling and there has been no shortage of coverage on GOOG in the
media. Almost every day you hear one analyst put forward the bullish case, while
another puts forward the bearish case. This kind of news flow can make it very
confusing for investors looking to buy or sell GOOG shares. However, if you
follow PowerRatings
you would have a quantified way of determining if, and possibly more
importantly, when GOOG is a buy or sell.
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.
New!
Click here to learn how to trade
PowerRatings
in a simple, systematic way.
Ashton Dorkins
Editor-in-Chief