The Chaikin Power Gauge Rating (PGR) is 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 rating ranges from Very Bearish (likely to underperform) to Very Bullish (likely to outperform).
How is it 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 PGR 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 I use it
Since it includes so many key technical and fundamental metrics, the PGR can be an important building block in a Buy/Sell evaluation.
In short, the easiest way to benefit from the PGR 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 PGR should not be used in isolation — you may want to consider other factors such as Industry Group strength and timing, which Chaikin Analytics Signals are designed to assist with.