Most traders know how to look at performance, but very few know how to get an accurate read on momentum within performance.
That’s the key distinction that Barchart’s Senior Market Strategist John Rowland, CMT, and Chart of the Day columnist Jim Van Meerten unpack in this video clip – and it’s an essential, practical lesson for traders trying to avoid chasing tops or holding stocks past their prime.
The conversation centers on two deceptively simple metrics:
- Weighted Alpha
- 52-Week Performance
Individually, both are useful. Together, they can tell you whether a trend is accelerating, stalling, or quietly losing steam.
Why 52-Week Performance Alone Can Be Misleading
Any given stock’s 52-week performance number is a snapshot. It tells you how a stock performed between two fixed points in time — today versus a year ago.
That’s valuable context, especially for long-term investors. But it has one major limitation: It doesn’t care when those gains happened.
A stock could be up 30% over the last year… but if most of those gains were accrued months ago, the trend may already be tired.
That’s where Weighted Alpha changes the game.
What Weighted Alpha Really Measures
Weighted Alpha places more importance on recent price action.
As John explains in the clip, swing traders and momentum traders use it in two ways, as both (1) a timing tool and (2) a risk-management signal.
- When Weighted Alpha is rising, it suggests momentum is accelerating right now.
- When it flattens or rolls over, it can signal trend exhaustion, even if price still looks strong on the surface.
This is how pros spot changes in asset behavior before they show up in headlines.
The Relationship That Matters Most
Jim Van Meerten lays out the framework for putting these metrics to work:
Weighted Alpha ABOVE 52-week performance:
→ Momentum is accelerating
→ Trend strength is increasing
Weighted Alpha BELOW 52-week performance
→ Momentum is decelerating
→ Trend may still be positive, but risk is rising
The latter scenario doesn’t automatically mean “sell.” Instead, it means traders may want to adjust expectations, position size, or time horizon.
That kind of nuance is what separates disciplined traders from emotional ones.
Why This Matters for Both Traders and Investors
John and Jim operate along different timeframes, but they agree on one rule: If a stock isn’t beating its benchmark, it probably doesn’t belong in your portfolio.
- For long-term investors, strong 52-week performance confirms the primary trend.
- For traders, rising Weighted Alpha confirms short-term momentum.
When both align, you have confirmation. And when they diverge, you have information.
That information is your edge.
A Real-World Benchmark Example
In the clip, John points to these metrics on the S&P 500 Index ($SPX) as an example. The benchmark’s 52-week performance is around the mid-teens, while its Weighted Alpha is higher, at +18.28.
That combination tells us something important – namely, that the market’s momentum isn’t just positive; it’s still accelerating.
That’s not a prediction, either – it’s a technical condition.
Why Barchart’s Tools Matter Here
This framework is only useful if you can see the data clearly.
Using Barchart Stock Screeners, traders can:
- Sort by Weighted Alpha
- Compare it directly to 52-week performance
- Layer in Barchart Technical Opinion for confirmation or divergence
- Build custom views based on technical indicators and fundamentals
That’s why Jim’s Chart of the Day template and John’s momentum approach translate across trading and investing styles. They’re rules-based, not emotional.
The Takeaway
You don’t need the ability to predict tops or bottoms to trade well. However, it certainly helps to recognize when momentum is speeding up, or quietly fading.
Weighted Alpha tells you how fast the “vehicle” of the market is moving right now, while 52-week performance tells you how far it’s traveled.
Professionals use both together for the clearest picture.
Watch the clip to hear two market vets explain it all:
- Check out John & Jim’s full momentum training
- Sign up here for John’s next technical teaching session
On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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