What is PowerRatings Saying About the S&P 500 Index?
As of the writing of this article, the S&P 500 is breaking to
new multi-year highs. Let’s take a deeper look into the S&P 500 Index with
PowerRatings.
PowerRatings is a simple to use (and powerful)
ranking system that ranks stocks from 1 to 10. Stocks rated 9 and 10 have
outperformed the average stock by 12 to 1 since 1995 and ideally are the stocks
to focus on each day. Stocks rated 1 and 2 on average have lost money, and you
want to know these stocks in order to avoid them.
From the list below, we can see that there are
many more stocks that have low PowerRatings (3 or below) than stocks with high
PowerRatings (8 or higher). This tells us that as the market moves higher and higher, the list of 9’s and
10’s becomes smaller and smaller. Meanwhile the list of 1’s and 2’s grows larger.
Conversely, when the market declines, the list of 1’s and 2’s gets smaller and
the list of 9’s and 10’s grows larger. This happens because you are
statistically more likely to be successful by buying into short-term weakness
and selling into short-term strength. All of our
historically backtested research indicates this, and it is one of our
10 Rules For Successful Investing.
Each day we publish an S&P 500 PowerRatings list,
which can be found
here.
Here is a partial list of today’s S&P 500 stocks:
Let’s take a look at daily charts from S&P 500
companies with PowerRatings of 7 or higher:
Dow
Jones Company
(
DJ |
Quote |
Chart |
News |
PowerRating)
Dow Jones & Co.
(
DJ |
Quote |
Chart |
News |
PowerRating) has a high PowerRating of 8. The
company is currently a takeover target, so any positions should be monitored
very closely.
Deere & Company
(
DE |
Quote |
Chart |
News |
PowerRating)
Deere & Company has a PowerRating of 7. DE has recently
pulled back from its all-time high of $123.40. Keep this stock on your
watchlist for a move back to the upside.
Next we will take a look at a few charts of stocks with low
PowerRatings. These should be avoided or if you are a more aggressive
trader you can look at these for potential short positions.
Cooper Tire and Rubber
(
CTB |
Quote |
Chart |
News |
PowerRating)
Tire manufacturer CTB has a low PowerRating of 2. From the
chart above, we can see that it has made a strong move upwards over the last
several sessions. Entering now may hold more risk. Â
Fortune Brands
(
STZ |
Quote |
Chart |
News |
PowerRating)
Alcohol importer Fortune Brands
(
STZ |
Quote |
Chart |
News |
PowerRating) has
similar characteristics to CTB above. It has also made a nice move to the
upside recently. Keep this on your watchlist if you are looking to short.Â
If you would like to attend a free class which covers this
research and strategy further, please
click here
for the calendar of the upcoming online classes. Topics
covered include our latest research on
entries and exits, and
how to use PowerRatings with our new
Preferred Stock List.
For a free PowerRatings trial,
click here. If
you have any questions about PowerRatings or the new Stock Indicators please
feel free to email us or call 213-955-5858 ext 1.
Darren Wong
Associate Editor
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.