Product Review: Group Power by Dennis D. Peterson GroupPower, a website created by analyst John Bollinger, provides unique analysis data for some 237 industry groups. The premise is that the market shifts its interest to stocks in an industry group that the market believes is growing, and sells those industries that it thinks will do poorly in earnings, sales, or pretax profits. What the site does extremely well is allow you to drill down to find individual stocks in a group that has the potential of moving up or down. Used along the way are numerous indicators of high quality and techniques. It’s overwhelming, but let’s see if we can find a road map (for an alternative, see the sidebar provided by John Bollinger). MARKET OVERVIEW At the outset you need a sense of market direction (Figure 1). Indicators that I have liked, but sometimes have had a problem finding, are available, such as how many items are above their moving average. In this case, the items are industry groups as opposed to individual equities. A key factor in making this work is through a process Bollinger calls “rational analysis,” equities that trade in the same direction and are in the same industry group. Thus, there isn’t an industry group called “Transportation” that includes both United Airlines and Knight Transportation (trucking), although there is a sector called “Transportation” with industry groups for airlines versus trucking. Datapoints for industry averages are created daily by normalizing the average price for each equity within a group with its average price two years ago. If you have a question about calculation, the upper left portion of the screen often provides detail or maybe a summary explanation. |
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