I’ve got two scans that I use to look for potential trade setups everyday. With over 6,000 stocks to choose from, it’s important to get that down to a more manageable number, especially if you’re a one man show like me.
My first scan really just gets me the most liquid stocks that tend to move a bit. So my criteria is:
Last >= 20 (to get that huge 6,000 number down. Large institutions also don’t look at penny stocks, so neither will I)
Beta >= 1 (I want the stock to move a bit)
Volume average >= 2000000 (I want only the most liquid stocks)
Open interest calls-puts >= 10,000 (I usually trade options, so I want the tightest bid-ask spreads)
I use Tradestation for this (pictured above) but you could just as easily use a site like Finviz. This usually gets me down to a list of about 220 stocks. Once I have those, they form the input into my second scan, which is based off of my trading chart – the 60 minute chart.
My second scan, which runs hourly throughout the day, looks for stocks from the list above that have made an extended range candle on the 60 minute chart. In other words, they have just made a candle with a range that is 2.3 times larger than the average of the previous 23 candles. This tells me that there is some big player(s) involved, and helps me find where the action is at. Here is an example in $CAM where it made a big ERC out of the $58.27 level, so I will be looking to buy when it retests that zone.
To enhance your odds even more, take a look at the finviz groups page (I look at the three month performance), and cross check a stock you want to trade based on the above scans to see if it is in one of the top 2 or 3 sectors. Getting help from the market and sector on any trade is a huge odds enhancer.
I hope this helps. I know it can be a daunting task sifting through thousands of charts looking for a viable chart to trade.
This had a big gap down this week and looks bearish. I think we can get down to $14.60 before we see some real buyers come in. I am looking to sell any move that gets close to $20.
Citi has been rallying fairly nicely from $48, and I am looking to join. I like the two highlighted zones, namely $52.87 (slightly more aggressive) and $51.45.
Canadian Solar ($CSIQ)
The weekly chart is not all that great on this one, but the 60 minute zone is tight enough that I am willing to take a trade, considering that if it holds we are putting a large bottom here, in other words, if it holds, we have a lot of room to run.
It looks to me that last week we finally flushed the weak longs and this is ready to go. This is a good looking position trade to me.
Good looking zone here at 23.12, nothing fancy, just good zone, good RRR.
This has put in a base on the weekly chart and I really like the look of the 20.52 level for a long. Solid setup.
This has been on a tear and might be looking to pull back a bit. I’m looking at the 48.56 level to enter a long position.
Netflix got pounded after earnings and is still digesting. I like this one for a position trade, and I’ll be looking to trade it at the 354.17 level. It’s working off weekly demand and I see weekly supply at 475 which gives us a lot of room to go.
This one has been a high flyer but has failed a number of times at 85.50 so I am looking to get short. It made a lovely overnight level at 78.96 which is where I am looking to get short, targeting 60.
The S&P futures made a nice rally-base-drop overnight that I will be looking to sell. The zone is from 2,052.25 – 2,054. Since making the zone it has just been chopping around in the pivot range. I have three targets on that zone, the first three points, the second at the demand level at 2,037.50 & the last at the daily chart demand at 2,030.50 (see image below). It is not uncommon for the futures to sell off first thing these days, only to catch a bid and rally for the rest of the day.
Looking at the daily chart, there is a lovely looking demand level at 2,026.75 – 2,030.50 that I will be looking to buy. It is fresh, and also a bear trap as I think there are some stops under 2,031.25.
This is an interesting one. It go whacked after earnings and has rallied ever since. Last Friday it had very strong move from the 314-316 level, and I am looking to buy should we get there again. I think there will be weak longs with stops below 318.03, which makes it an interesting trap trade too.
Alibaba Group ($BABA)
BABA has been on a tear lately and is pulling back. There are three zones where I am looking to trade – in the 108, 104 & 98 areas.
Another strong tech stock that looks good on the higher timeframes. I like the look of the gap fill area at 59.13.
I love Google as a company and I use many of their products, but the stock has lost it’s mojo of late. Having said that, I am looking at a sneaky little area at 533 for a swing long. I believe $GOOGL under 600 is a bargain, so I’ll be swinging and adding to a long term position trade there.
Lululemon Athletica ($LULU)
The LULU weekly looks like it has put in a bottom so I am looking to get long on a pullback. I like the look of the 41.50 area as a nice clean entry point.
What in interesting two days in the market. Yesterday a huge selloff and then today the huge fed-induced rally. I thought we still had a fair amount of room to go to the downside up until a couple of hours ago, but now I believe it is time to be long hunting again. My reason: all four of the indexes put in pink extended range candles today, many of them engulfing too.
I’ve noticed that all too often trends start and end with a big blow-off pink extended range candle. The lows of today are important – above and I am long hunting, below and it is all bets off again.
I have been very bullish on the financials ($XLF) but the market is starting to look a little tired, and I think the financials will be dragged down too. I got short Goldman Sachs ($GS) today, and am looking for a selloff into next month. The next good looking daily demand is 173.27.
My entry is a somewhat tiny 15 minute zone, but to me this short term price action is telling. $GS failed at the highs earlier this weak, and is now starting to break down in my opinion.
I closed a bunch of trades today, and sit largely in cash, looking for tactical opportunities every day. Now is not a time to be loading up for the long term.
There are also a number of opportunities to get short in some other names, and I have resting orders to sell. These names include