The Chaikin Analytics Process

Chaikin Analytics can be used in many different ways. For finding solid stocks with good entry points, we favor the following process which the Checklist highlights.

• Top Down – Be in the right Sectors and Industries: On the chart, you can quickly see if the stock is in a strong or a weak industry group. The strong / weak designation is determined by the Chaikin Power Bar Ratio which tells you if the industry has more bullish than bearish stocks (strong) based on the Chaikin Power Gauge Ratings of the individual stocks in the industry.

• Let the Power Gauge do the work for you: The Chaikin Power Gauge Rating is your directional edge. It tells you if a stock is more  likely to outperform or underperform the SPY (S&P 500). The 20 factors are the most common factors that Wall Street analysts use to determine the strength of a stock. We have taken the work out of this by combining the factors into a single rating.

• The 3 legs of the stool (PGR, Money Flow and Relative Strength):  Chaikin Analytics gives you a quick way to view how three different constituents view a stock. The Power Gauge rating tells you how Chaikin Analytics views the stock. Chaikin Money Flow (which is a proxy for institutional investor interest) tells you how the institutions are viewing the stock. We look for persistently good Money Flow. Finally, Relative Strength tells you how the market as a whole feels about the stock. If all 3 agree then you are putting the odds in your favor.

• Timing – how to enter at the right time, and know how to preserve your profits: There is nothing more frustrating than selling your stock only to find it has another leg to climb. Chaikin can provide you with an indicator that helps you time your entry and exit points. The Overbought/Oversold indicator is a great way to get a quick feel for where a stock is trading relative to its existing trend. When a stock becomes oversold and the three legs of the stool are bullish, it may be a good time to enter, but at Chaikin, we look for a move off of the bottom of the Oversold Indicator.