Over the last few articles, we set up chartlists and completed our first scan. It takes a while to write this out, hopefully with enough clarity, to enable you to set up your account with this process.
So the stocks in 6020 SCTR Top 25% are within the SCTR scale between 75- 100 on the day we put them in the group. Each day, stocks in this list will move around. Some will move up farther into the extreme. Once they are way up there, it is usually too late for a timely entry. Some may have run for a while in this group and need a rest.Some will have dropped in their ranking below 75. If we merge new stocks into the group each day, the chartlist will be bigger than 25%. Just to tune the example between SCTR 65 and 100, this is still a strong list. My thinking is a strong stock pulling back to 65, has a much better chance of returning to the strong list, than ones that have not been there before. Institutions already have money tied up in the strong stocks. The institutional investors are more likely to add on weakness. In this article, we want to create a scan to find a shortlist of stocks we are interested in that has this buying interest starting to show up. I call this the 6022.0 Strong Stocks Moving Up Scan.
You may recall we created a chartlist named 6022. This chartlist is todays target. This chartlist is for any new charts moving 'up' into the zone of interest between 76 and 80. Let's talk about the scan and when it becomes beneficial for us. But in this sweet spot zone, we need to remain focused.
We want to scan on the 75-80 level and look at those stocks in a very focused way
If we keep merging stocks into 6020, rather than replacing them, we still have a list of strong stocks, but some of them will be stocks just pulling back. For the sake of argument, we have a stock that was at a SCTR 85, and has pulled back to an SCTR of 65. We don't want to buy it until it starts to turn back up. We could do a couple of unique things.
1) We could scan this list for stocks crossing from below to above the 76 , 78, and 80 levels. As they enter the top 25% again and are moving up, we want a list of these to look at.
2) We also want a wider scan, that is looking for stocks that may have risen very quickly in their ranking recently. Say from 60 to 75 in a few days. Something is kicking in. We don't need to know if it was earnings, mergers acquisitions, or rumours of great new products. Is all we really want to know is the stock is showing sudden price appreciation, and we may want to buy in and enjoy the ride. Show us those charts so we can visually identify any we might like to invest in.
As long as the stocks are moving higher, I want to put them into a chartlist that I can view often. These may be the David Ortiz type of stocks. Hitting .688 in the World Series type of stocks. Next year is too late. We want to see what is charging now. When you look at winners all the time, you get better at making money. If I just leave them in a larger group, it makes it difficult to watch them closely. So there are two things to do. 1) put them in a temp chartlist to quickly scan for today that I write over day after day. 2) Also merge them in the strong stocks moving up chartlist so I am building a list over a few days or a couple of weeks
So add your comment line with the title of the scan.
// 6022.0 Strong stocks moving up.
Delete the type and volume line from the scan criteria.
Next we need to go down and get the chartlist information for the scan criteria from the scan builder.
We need to start with the 6020 chartlist for this scan. Each chartlist has a list number assigned by Stockcharts. It is different for each person so I can't predict what your list number will be.Under scan builder, scroll down to the chartlists line. You will need to insert the chartlist 6020 for us to scan within. We will use the 6020 scan a few times in some of the chapters so this is an important step. Mentally make a note of that list number.
Because this is the first clause in our scan, we need to delete the word 'and' so the line starts with the square bracket.
changes to
Above the line, you can add comment lines.
//6022.0 Stocks moving up in the power area of the SCTR today from list 6020
// This is a scan to find stocks that may be about to start a big move within the strong Canadian stocks chartlist.
// Place results in a scan dump folder. This is a temp file. Don't annotate charts in here.
// Run the scan again and merge into 6022 STRONG STOCKS MOVING UP NOW
// The actual elements of the scan are to look for a rising SCTR moving into the top 25%.
// Usually, when the SCTR reaches 80, the stock will start its rise.
// The buy point happens when it breaks above near term resistance based on viewing the chart.
// Obviously, the ticker symbol must be changed with each alert.
// favorites list is 33 = 6020 SCTR GREATER THAN 75 SCAN so this will search the stocks moving into the top 25% today
[favorites list is 33] // 6020 SCTR Top 25% List
Now we need to find the stocks that entered 6020 today on a strong push up.
So we are going to use the following line for the scan.
after the square bracket line, lets add a comment for the next line of code.
// SCTR crossing above 76, 78 or 80.
Now for the programming, the line should read as follow:
and [[SCTR x 76] or [SCTR x 78] or [SCTR x 80]]
Now what this line actually does, is find stocks moving up. If the stock moved from 75 to 77, this would catch it. The 'x' means crosses above. So when the SCTR at 75 crosses above 76 today, this will find that stock within the 6020 chartlist. The idea behind the additional clauses is that the stock may be above 76 already but is now continuing the move up. I want to know about any strong stock approaching 80. This line of code will do that.
// favorites list is 33 = 6020 SCTR GREATER THAN 75 SCAN so this will search the stocks moving into the top 25% today
[favorites list is 33]
// SCTR crossing above 76 or 78 or 80.
and [[SCTR x 76] or [SCTR X 78] or [SCTR x 80]]
So the final look is this:
//6022.0 Stocks moving up in the power area of the SCTR today from list 6020
// This is a scan to find stocks that may be about to start a big move within the strong Canadian stocks chartlist.
// Place results in a scan dump folder. This is a temp file. Don't annotate charts in here.
// Run the scan again and merge into 6022 STRONG STOCKS MOVING UP NOW
// The actual elements of the scan are to look for a rising SCTR moving into the top 25%.
// Usually, when the SCTR reaches 80, the stock will start its rise.
// favorites list is 33 = 6020 SCTR GREATER THAN 75 SCAN so this will search the stocks moving into the top 25% today
[favorites list is 33]
// SCTR crossing above 76 or 78 or 80.
and [[SCTR x 76] or [SCTR X 78] or [SCTR x 80]]
All these comments explain how to use the scan, but there are really only 2 active lines in the scan.
[favorites list is 33]
and [[SCTR x 76] or [SCTR X 78] or [SCTR x 80]]
Save the scan using the ''save as button on the top right under the drop down box as "6022.0 Strong Stocks Moving Up Above 76,78, or 80"
The reason for the '0' on the end of 6022 is so we can place multiple scans in the same chartlist. So our first scan will be 6022.0, the next will be 6022.1 etc. if we want the results to go into 6022.
Now run the scan. Watch the tabs again. This scan should give you a small workable list, say less than 25 stocks to work with. They are sorted alphabetically, not in the order the scan found them.
Lets place the stocks in both chartlists.
So we can place the scan results in the new chartlist called '6021 - Quick Look Stocks Going Up - Nothing Permanent'. Remember to replace so the only thing in this temporary list is todays results.
Run the scan again and merge the results in 6022. We can merge them straight into the 6022 chartlist by using the drop down box on the top left.
So now you have the names of nice stocks that you really like, at a really interesting place on the chart. These are prime investment candidates. So now that we see them, we want to monitor this list of strong stocks moving up quickly on a regular basis. The idea is that tomorrow and the next week as we keep doing this, is that we will write over the chartlist in the temporary folder each day and we will merge the stocks into the 6022 for more permanance. The reason for the two steps, is that the 6022 chartlist will already have stocks in it, from a week ago. So in order to clearly see the strong stocks for today hitting the sweet spot, we take an extra step. You may just want to look at the 6022 in detail every day anyway. It is just a personal style.
In the next Chapter, we will look at another method that may find strong stocks just before they breakout.
Good Trading,
Greg Schnell, CMT
