Over the last 6 months in US the top 25% performers of the 500 largest cap stocks recorded an average gain of 102% . In Europe the top 25% of the 600 largest cap securities posted an average profit of 65%.
The performance dispersion is a gold mine for active managers using next-generation, advanced analytics that can help to capture the majority of upside attributed to strong trends.
Trendrating provides “Trend Validation” metrics that contribute to profiting from performance dispersion, maximizing the returns of any investment strategy.
– Rocco Pellegrinelli, Founder & CEO of Trendrating
March Sector Allocations
Methodology
To arrive at our monthly Sector Allocations, we delineate the S&P 500 universe of stocks into five groups based on their Smart Momentum Score (SMS). Any stock that has retraced at least 20% from a trend high is considered an outlier. The sector allocation is then found by looking at the proportion of names within quantile one for each sector. To control risk, no sector can represent more than double its weighting in the index.
March Allocations
Over the last few months, the market has been driven by a handful of securities. The Trendrating model is heavily overweight Consumer Discretionary, Financials and Industrials and has slight overweights to Energy and Materials. Conversely, Trendrating identifies the sectors with the weakest trends as Information Technology, Communication Services, Health Care, Consumer Staples. We are neutral on Real Estate and Utilities which have a deviation of less than +/- 2% from the index weighting..
US Macro Market View
Top Trending Stocks in the S&P 500
Methodology
Each month we distribute the Trendrating 100 list to our clients. We delineate the S&P 500 universe of stocks into five groups based on their Smart Momentum Score (SMS) and retracement value. Any stock that has retraced over 10% from a trend high is considered an outlier. This leaves us with a list of names in which our Model has high conviction. The market environment will dictate the number of names in the Top 100 list, but it will typically range from 80-100 companies. Here will be highlighting the Top 25 companies each month. Contact Trendrating for the complete list.
Trendrating Terminology
Rating Grade: A = Strong Bull Trend / B = Emerging Bull Trend / C = Emerging Bear Trend / D = Strong Bear Trend
Smart Momentum Score (SMS): is a continuous rating scale between -3 and 3, measuring the strength of the trend since that trend began. The metric allows the model to differentiate between securities of the same ratings, whether that is an A, B, C or D rated security.
Retracement: The percentage off the peak of the trend for positive trends or off the bottom for negative trends.
Additional Information
Proven Effectiveness – A 20-year back test supporting Trendrating’s sector allocation approach
Trendrating Brochure – An overview of the services we offer
Pinnacle Trendrating Innovative Equity Fund (IPTRX) – A mutual fund utilizing our trend capture model
Contact us to request more information about Trendrating’s web-based platform
ANY AND ALL INFORMATION PROVIDED BY TRENDRATING OR DERIVED FROM TRENDRATING’S DATA IS PROVIDED “AS IS” AND TRENDRATING MAKES NO WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Trendrating has no affiliation with any company mentioned in this report.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Source: Nasdaq Inc