A Relative Price Strength Screen for All Markets

This week, Kevin Matras goes over a Relative Price Strength strategy for finding winning stocks in all markets. See how and what stocks came thru.

The last week or two has been a tough market. And even though I remain positive on the market, here’s a screen that doesn’t need a bull market to succeed.

In fact, in this week’s screen, I’m going to go over a Relative Price Strength screen that’s been beating the market in both good times and bad.

The parameters to this screen are as follows:

  • Zacks Rank <= 2
    (Only Buys and Strong Buys)
  • Avg. Broker Rating = 1
    (Since Brokers are typically bullish ‘everything’, they have to be fully on board.)
  • Relative % Price change – 12 weeks >= 15
    (I’m looking for stocks that are outperforming the S&P 500 by 15% or greater over the last 12 weeks.)
  • % Price Change – 12 weeks >= 5
    (Simply beating the S&P is not enough. They also have to be up in price in absolute terms by 5% or more.)
  • Current Price/52 Week High >= .80
    (I’m looking for stocks that are trading at greater than or equal to 80% its 52 Week High, i.e. no more than 20% from its 52 Week High. Only stocks high up in their uptrend are allowed.)
  • Current Price >= 5
    (They all have to be trading at a minimum of $5 or higher.)

The Results

I ran a series of tests using a 4 week holding period over the last 5 year time span. Each test was started on a different start date to eliminate coincidental performance and to verify robustness.

In the bear market of 2002, this strategy showed an average compounded gross return of 13.5%.

In the cake-walk of 2003, it showed a whopping 102.9%.

In 2004, the strategy showed an average compounded gross return of 48.9%.

In 2005, the returns were 64.6%.

And in 2006, the returns came in at 22.6%.

There are 17 stocks that made it thru this week’s screen (3/6/07).

Company

Ticker

Zacks Rank

Avg. Brkr. Rating

% Ch. Price 12 Wks. Rel. to S&P 500

% Ch. Price 12 Wks.

Curr. Price /
52 Wk. High

Current Price

FOOD

Overhill Farms

OFI

2

1

94.36%

89%

0.84

$5.50

AUTOS-TIRES-TRUCKS

Amerigon Inc

ARGN

2

1

16.6%

13.39%

0.97

$11.18

METALS-NON FERROUS

Brush Engineered

BW

1

1

20.38%

17.07%

0.86

$41.91

POLLUTION CONTROL

Ceco Envirnmntl

CECE

2

1

61.37%

56.92%

0.82

$14.17

COMPUTER-OFFICE EQUIPMENT

Echelon Corp

ELON

2

1

19.02%

15.74%

0.9

$9.19

COMPUTER SOFTWARE-SERVICES

I2 Technologies

ITWO

1

1

23.14%

19.75%

0.88

$23.53

Synchronoss Tec

SNCR

2

1

43.13%

39.19%

0.91

$17.12

ELECTRONICS

Cpi Intl Inc

CPII

2

1

31.17%

27.56%

0.91

$17.59

TELECOMMUNICATIONS EQUIPMENT

Globecomm Systm

GCOM

2

1

20.84%

17.52%

0.97

$11.07

TELECOMMUNICATIONS SERVICES

Orbcomm Inc

ORBC

2

1

58.81%

54.44%

0.86

$12.00

AEROSPACE-DEFENSE

Ducommun Inc De

DCO

2

1

15.19%

12.01%

0.97

$25.55

BANKS & THRIFTS

Utd Western Bcp

UWBK

2

1

19.03%

15.75%

0.97

$23.15

INSURANCE

Amerisafe Inc

AMSF

1

1

32.82%

29.16%

0.95

$17.63

TRANSPORTATION-AIR

Copa Hldgs Sa-A

CPA

2

1

17.33%

14.1%

0.8

$52.44

TRANSPORTATION

Dryships Inc

DRYS

1

1

37.79%

33.99%

0.98

$20.55

Ultrapetrol Ltd

ULTR

1

1

29.52%

25.95%

0.86

$16.55

BUSINESS SERVICE

Sm&A

WINS

2

1

26.59%

23.1%

0.94

$7.30

Learn how to find winning stocks in any market. Test this screen and others or build your own strategies and test them. It can all be done with the Research Wizard. Sign up for your free trial now. http://researchwiz.zacks.com

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
TAGS: Archive
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish