When evaluating investment ideas, look for stocks where the Power Gauge Rating has been in alignment with the technical indicators on the Chaikin chart.
We use the term “Classic Bull” to refer to a stock which has had a persistent Bullish or Very Bullish rating, and with:
- Price above a rising long-term trend
- Strong Chaikin Money Flow (with persistency of green, or accumulation)
- Strong Relative Strength (with persistency of green, or outperformance)
The above chart shows this “Classic Bullish” pattern.
It adds further confirmation when a Classic Bullish stock is in a strong Industry Group.
Conversely, a “Classic Bear” has had a persistent Bearish or Very Bearish Rating with:
- Price below a falling long-term trend
- Weak Chaikin Money Flow (with persistency of red, or distribution)
- Weak Relative Strength (with persistency of red, or underperformance)
Classic Bears in weak Industry Groups can be excellent short candidates, especially in times of overall market weakness.