There are TWO TYPES of Power Gauge ratings. One rates stocks and the other rates ETFs.
The Chaikin Power Gauge Stock Rating
The Chaikin Power Gauge stock rating is at the core of the Chaikin Analytics system. It combines 20 factors into a simple, reliable indication of a stock’s potential performance relative to the market over the next 1-6 months. It is supported by 10 years of independent backtesting and successful real-world performance since 2011.
The model looks at the following components:
- Financial Metrics
- Earnings Performance
- Expert Sentiment
The stock rating ranges from Very Bearish (likely to underperform) to Very Bullish (likely to outperform).
There are two additional Power Gauge Ratings, Neutral + and Neutral -. These ratings are the result of a technical adjustment after each day's trading data is compiled. Neutral + is a Bullish Stock trading below its long term trend and a Neutral - is a Bearish Stock trading above its long term trend.
How is the stock rating computed?
Each market day, a Power Gauge Rating is computed for all stocks in the system which have at least one year of trading history and report earnings. Recent IPOs and ETFs will not have a Power Gauge Rating.
Twenty factors are weighted and combined into a daily Power Gauge stock rating value. The end-of-week rating is stored as the historical value for the week.
The model is designed so that in non-trending markets there will be a consistent percentage of stocks with each rating at any given time. In strongly trending markets there may be more Bullish or Bearish stocks.
Calculations are performed by our portfolio modeling provider, portfolio123.com, which sources data from S&P Compustat.
How do you use the stock rating?
Since it includes so many key technical and fundamental metrics, the Power Gauge stock rating can be an important building block in a Buy/Sell evaluation.
In short, the easiest way to benefit from the Power Gauge stock rating is: consider buying or holding Bullish stocks, and avoiding Bearish stocks.
Of course, any investment decision depends on many factors, including suitability relative to your financial goals. The Power Gauge should not be used in isolation — you may want to consider other factors such as Relative Strenth and Money Flow. Use Overbought/Oversold to help with timing.
The Chaikin Power Gauge ETF Rating
The Chaikin Power Gauge ETF rating combines our proprietary stock rating model with technical analysis factors into a unique view of an ETF’s potential.
Unlike other models, only Chaikin Power Gauge ETF ratings look at the underlying fundamental and technical characteristics of an ETF’s constituent holdings to determine its potential to out- or underperform the market.
The ETF rating ranges from Very Bearish (likely to underperform) to Very Bullish (likely to outperform).
The ETF Power Gauge consists of three components. The Technical Rank which is a Proprietary Rank of the Technical Strength of this ERF relative to all US-Listed ETF's. The second is the US Equity PGRs and this indicates the aggregate Power Gauge ratings of the US Equities held by this ETF. The third is the US Equity PGRs (Weighted) which indicates the Aggregate Power Gauge Ratings of US Equities weighted by the percent of total ETF Holdings.