Swing Trading with PowerRatings: Buying the Selling in Semiconductors
For many traders, successfully buying and selling stocks and exchange-traded funds (ETFs) comes down to being able to answer two key questions:
What should I buy?
When should I buy it?
This week was a classic example of how tools like PowerRatings can help independent swing traders answer these questions. With PowerRatings, swing traders can identify not just what markets have the biggest edges. PowerRatings also enables swing traders to know exactly when the time is right to strike, buying these markets just before they rally into strength.
The classic example from this week that I’m thinking of is the way semiconductor stocks in general and the ^SMH^ in specific responded to a PowerRatings upgrade this week.
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In the waning days of March, the SMH was trading with neutral PowerRatings of 6. Then, on the very first day of April, the Semiconductor HOLDRS ETF pulled back, earning a major PowerRatings upgrade to 9. For traders who rely on the quantified edges revealed through PowerRatings, this upgrade was a major signal that the ETF had moved to levels from which it had historically made significant gains.
The fact that the SMH closed lower still the following day, maintaining its PowerRating of 9, likely was seen only as further opportunity for aggressive traders looking to take maximum advantage of the kind of sharp pullbacks that typically acccompany major PowerRatings upgrades.
And as the chart shows, SMH rallied into strength shortly thereafter, closing higher by well over 3% from its final, 9-rated close on April 4th.
Have you taken the time to see what PowerRatings – for both stocks and ETFs – can do for you and your trading? Whether as a compliment to a breakout-based trading strategy or as a primary strategy for buying low and selling high, PowerRatings provide the average, independent trader with the kind of quantified edges that historically only Wall Street professionals have had access to.
So if you weren’t buying ETFs like SMH as they sold off at the beginning of the month, then you owe it to yourself to try a free, 7-day trial to PowerRatings. Whether you trade stocks or ETFs, long or short, PowerRatings will help you know every day where the biggest edges in the market are.
Show me what PowerRatings can do. Sign me up for a free, 7-dy trial to PowerRatings.
David Penn is Editor in Chief of TradingMarkets.com