Scanning the Market During the First Hour
Stockscores.com Perspectives for the week ending May 9, 2016
|
| Upcoming Events |
Saturday Webinar
This week's webinar is "How to Trade the Stockscores Approach"
Click Here to Register
|
|
In this week's issue:
In This Week's Issue:
- Upcoming Webinar - How to Trade the Stockscores Approach
- Stockscores' Market Minutes Video - When to Trade Hard
- Stockscores Trader Training - Scanning the Market During the First Hour
- Stock Features of the Week - Stockscores Simple Weekly
Webinar - How to Trade the Stockscores Approach
Saturday May 14
11:00am PT, 2:00 pm ET
Last Saturday's webinar had a huge audience with lots of positive feedback on the webinar, thanks everyone!
This week's webinar is "How to Trade the Stockscores Approach"
For over 25 years, I have been picking winning stocks using one simple concept. During this webinar, you will learn my secret for finding the hot stocks of the future and get a demonstration of the tools we have built to find them.
Click Here to Register
Stockscores Market Minutes Video - When to Trade Hard
Trading will not yield the same opportunities day by day or week by week. There are times when the market is more tradeable and that is when you must work hard. When the market is not in your favor, get lazy. I explain that and provide my weekly market analysis.
Click Here to Watch
To get instant updates when I upload a new video, subscribe to the Stockscores YouTube Channel
Trader Training - Scanning the Market During the First Hour
Stocks that are in play, those that have the story to capture buyer interest and enjoy market beating trends, leave clues. The outperformance of these stocks are driven by new information that gets the buyers excited and willing to pay higher prices, pushing these stocks in to market beating upward trends. Whether you like to trade large cap, well established companies or penny stocks, the signals from the market are the same.
The process to find them is very simple if you have the right tools. The Stockscores Market scan and an hour of your time at the start of the trading day will allow you to search all North American markets for the markers that telegraph a stock's future out performance. Before I explain what to look for, let me provide some insight in to the theory behind the trading concept.
Stocks that go on the steep upward trends that we all love to own do so because there is significant fundamental change in the company. Actually, to be more accurate, I should say that there is a perception of significant fundamental change. What is actually happening is not as important as what investors perceive to be happening. Sometimes stocks move simply because investors renew their interest in a good company.
These stocks move because of new information. A pharmaceutical company may have a new drug that is showing positive effects in testing. A mining company may be on the verge of a major discovery or a retailer may be enjoying great earnings because consumers love their products. Ultimately, it is about an improved potential to make money in the future.
The question you have to ask is, "Do all investors get the new information at the same time?"
The answer, of course, is no. Every stock has investors who follow the company very closely and know more about what the company is doing than anyone else. These investors have an advantage over other investors because they can uncover new information earlier.
When they do find out something significant, they act. If the new information is positive, they buy the stock aggressively, causing the stock to move up in price and trade more volume than normal. Those are the signs that we want to look for.
Most of this abnormal market activity starts during the first hour of the trading so the trader who can dedicate that time to trading can uncover around 80% of the good entry signals that come through the trading day. If you have all day then you can find the other 20% of the opportunities as well.
The Stockscores Market Scan tool allows you to scan all of the North American markets for stocks that meet a variety of criteria. There are many ways to set up the tool to look for stocks that are "in play" but here are some simple settings to apply in the first hour:
Exchange - I like to scan the Canadian exchanges separately from the US exchanges because the Canadian market is less liquid, requiring a lower liquidity threshold which I will explain in a moment. So, set this filter to either All Canadian or All American.
Gain/Loss - set this to > 3% over the past 1 days. This will find the stocks that are moving up.
15 day Resistance - set this to breakout, doing this will help you avoid the stocks that are stuck in trading ranges and unlikely to make a lasting upward trend.
Volume Relative to 20 Day Average - set this to Above.
Number of Trades - this is the liquidity requirement, to trade we need stocks that are active enough to get in and out easily. Set this to > 200 for the Canadian exchange or > 1000 for the US.
You can start to run this scan about half an hour after the market opens. When inspecting the charts, look at both the daily and the intraday 15-minute chart. You want to focus on stocks that are starting moves out of low price volatility and with market activity that really stands out relative to how the stock normally trades.Back To Top
As the markets stall at long term resistance, there are fewer trading opportunities as investors are uncertain if this is the end of the upward trend or just a pause along the way. Shorter term trading lacks conviction, making it better to either sit in cash and wait for the next wave of action or take a longer term view.
This week, I ran the Stockscores Simple Weekly Market Scan in search of longer term opportunities using the 3 year, weekly chart. Here are two that show good potential:Back To Top
1. NLY
NLY broke its downward trend a few months ago and recently broke up through resistance from an optimistic rising bottom. Will run in to its next level of resistance at $12.
Back To Top
2. SBRA
SBRA appears to have made a head and shoulder bottom and is now reversing the weakness that gripped the stock through most of 2015. Has made decent gains recently so considering on a pullback may provide a better reward for risk potential.
Back To Top
References
Get the Stockscore on any of over 20,000 North American stocks.
Background on the theories used by Stockscores.
Strategies that can help you find new opportunities.
Scan the market using extensive filter criteria.
Build a portfolio of stocks and view a slide show of their charts.
See which sectors are leading the market, and their components.
Disclaimer
This is not an investment advisory, and should not be used to make
investment decisions. Information in Stockscores Perspectives is often
opinionated and should be considered for information purposes only. No
stock exchange anywhere has approved or disapproved of the information
contained herein. There is no express or implied solicitation to buy or
sell securities. The writers and editors of Perspectives may have positions
in the stocks discussed above and may trade in the stocks mentioned. Don't
consider buying or selling any stock without conducting your own due diligence.
Back To Top
|
