How to find out of favor stocks

A reader has written saying, he is not very comfortable trading momentum and he would like to research out of favor stocks before they make a move. I get lot of emails like this from people who are not psychologically attuned to trading momentum based system. They are in other words value investors.

So I spent some time thinking about it and developed this simple screen to find out of favor, neglected stock. Most such stocks have many problems currently , but they might become good turnaround candidates. In some cases the sector is cyclical and out of favor. So one has to investigate the stocks to find value amongst them. In the stock market, it just takes a catalyst to get a out of favor stock back in to favour. So looking at these kind of stocks is not a bad idea.

So here is very simple screen to find out of favor stocks. Again it uses Telechart.

  • This scan uses the Easyscan functionality of Telechart.
  • Set up a Easyscan with Watchlist=All Stocks. Then add following parameters.
  • Price Growth Rate 5 years= Rank 1 to 25
  • Price Growth Rate 3 years= Rank 1 to 25
  • Price Growth Rate 2 years= Rank 1 to 25
  • Price Growth Rate 1 years= Rank 1 to 25
  • Price Percent Change 26-week= Rank 1 to 25
  • This will give you around 200 stocks to work with. You can use classical value based matrix to shortlist candidates from this.
  • Alternatively you can use a 4% breakout scan like ( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1 to generate few candidate to look at on daily basis. After all an out of favor stock must start rallying for it to make money.
Now taking the basic idea you can create variations of this scan to find out of favor stocks. Because Mr Market uses imperfect logic to price stocks, you can often find mis priced opportunities in this set of stocks.

As of now if you run this scan it gives following 217 stocks:

ADG,Allied Defense Group (the) (Google  Yahoo  Earnings  Chart)
ADLR,Adolor Corporation (Google  Yahoo  Earnings  Chart)
ADPT,Adaptec Inc (Google  Yahoo  Earnings  Chart)
ADSX,Applied Digital Solution (Google  Yahoo  Earnings  Chart)
AGIX,Atherogenics Inc (Google  Yahoo  Earnings  Chart)
ALLB,Greater De Valley Svg Bk (Google  Yahoo  Earnings  Chart)
ALT,Alteon Inc (Google  Yahoo  Earnings  Chart)
AMC,American Mtg Acceptance (Google  Yahoo  Earnings  Chart)
AMM,AMS Health Sciences Inc (Google  Yahoo  Earnings  Chart)
ANLT,Analytical Surveys Inc (Google  Yahoo  Earnings  Chart)
ANLY,Analysts International (Google  Yahoo  Earnings  Chart)
ANPI,Angiotech Pharmaceutical (Google  Yahoo  Earnings  Chart)
APPA,Ap Pharma Inc (Google  Yahoo  Earnings  Chart)
AROW,Arrow Financial Corp (Google  Yahoo  Earnings  Chart)
ASBI,Ameriana Bancorp (Google  Yahoo  Earnings  Chart)
ASTT,Asat Holdings Ltd (Google  Yahoo  Earnings  Chart)
ATAR,Atari Inc (Google  Yahoo  Earnings  Chart)
AVAN,Avant Immunotherapeutics (Google  Yahoo  Earnings  Chart)
BBA,Bombay Inc (Google  Yahoo  Earnings  Chart)
BFT,Bally Total Fit Hldg (Google  Yahoo  Earnings  Chart)
BKHM,Bookham Inc (Google  Yahoo  Earnings  Chart)
BPOP,Popular Inc (Google  Yahoo  Earnings  Chart)
BRKL,Brookline Bancorp Inc (Google  Yahoo  Earnings  Chart)
BSX,Boston Scientific Corp (Google  Yahoo  Earnings  Chart)
BUCA,Buca Inc (Google  Yahoo  Earnings  Chart)
CADE,Cadence Financial Corp (Google  Yahoo  Earnings  Chart)
CAU,Canyon Resources Corp (Google  Yahoo  Earnings  Chart)
CDIC,Cardiodynamics Intl Corp (Google  Yahoo  Earnings  Chart)
CHFC,Chemical Financial Corp (Google  Yahoo  Earnings  Chart)
CLS,Celestica Inc (Google  Yahoo  Earnings  Chart)
CMLS,Cumulus Media Inc (Google  Yahoo  Earnings  Chart)
CMPP,Champps Entertainment (Google  Yahoo  Earnings  Chart)
CNBKA,Century Bancorp Inc Cl A (Google  Yahoo  Earnings  Chart)
COA,Coachmen Industries Inc (Google  Yahoo  Earnings  Chart)
CPWM,Cost Plus Inc California (Google  Yahoo  Earnings  Chart)
CRBC,Citizens Republic Bancorp Inc (Google  Yahoo  Earnings  Chart)
CRC,Chromcraft Revington Inc (Google  Yahoo  Earnings  Chart)
CREAF,Creative Technology Ltd (Google  Yahoo  Earnings  Chart)
CRGI,Corgi International Ltd ADR (Google  Yahoo  Earnings  Chart)
CRGN,Curagen Corp (Google  Yahoo  Earnings  Chart)
CSAR,Caraustar Industries Inc (Google  Yahoo  Earnings  Chart)
CSK,Chesapeake Corp (Google  Yahoo  Earnings  Chart)
CTE,Cardiotech Internat Inc (Google  Yahoo  Earnings  Chart)
CTIC,Cell Therapeutics Inc (Google  Yahoo  Earnings  Chart)
CTTY,Catuity Inc (Google  Yahoo  Earnings  Chart)
CTU,Chad Therapeutics A (Google  Yahoo  Earnings  Chart)
CYAN,Cyanotech Corp (Google  Yahoo  Earnings  Chart)
CYTO,Cytogen Corp (Google  Yahoo  Earnings  Chart)
CZNC,Citizens & Northern Corp (Google  Yahoo  Earnings  Chart)
DAIEY,Daiei Inc Adr (Google  Yahoo  Earnings  Chart)
DANKY,Danka Business Syst Adr (Google  Yahoo  Earnings  Chart)
DEVC,Devcon International Corp (Google  Yahoo  Earnings  Chart)
DHOM,Dominion Homes Inc (Google  Yahoo  Earnings  Chart)
DLK,Semotus Solutions Inc.  (Google  Yahoo  Earnings  Chart)
DLPX,Check Technology Corp (Google  Yahoo  Earnings  Chart)
DRL,Doral Financial Corp (Google  Yahoo  Earnings  Chart)
DROOY,DRD Gold Ltd Adr (Google  Yahoo  Earnings  Chart)
EMAK,Emak Worldwide Inc (Google  Yahoo  Earnings  Chart)
EMVL,Euroweb International Corp New (Google  Yahoo  Earnings  Chart)
ESCA,Escalade Inc (Google  Yahoo  Earnings  Chart)
ESCC,Evans & Sutherland Comp (Google  Yahoo  Earnings  Chart)
ETC,Environmental Tectonics (Google  Yahoo  Earnings  Chart)
FACT,First Albany Companies (Google  Yahoo  Earnings  Chart)
FAVS,First Aviation Srvcs Inc (Google  Yahoo  Earnings  Chart)
FBC,Flagstar Bancorp Inc (Google  Yahoo  Earnings  Chart)
FBMI,Firstbank Corp (Google  Yahoo  Earnings  Chart)
FBN,Furniture Brands Intl (Google  Yahoo  Earnings  Chart)
FBR,Friedman Billings Ramsey (Google  Yahoo  Earnings  Chart)
FCF,First Commonwealth Finl (Google  Yahoo  Earnings  Chart)
FCZA,First Citizens Banc Corp (Google  Yahoo  Earnings  Chart)
FFBC,First Financl BAncorp Oh (Google  Yahoo  Earnings  Chart)
FMDA,Futuremedia Plc Adr (Google  Yahoo  Earnings  Chart)
FMER,Firstmerit Corp (Google  Yahoo  Earnings  Chart)
FNBN,FNB United Corp (Google  Yahoo  Earnings  Chart)
FNLY,Finlay Enterprises Inc (Google  Yahoo  Earnings  Chart)
FONR,Fonar Corp (Google  Yahoo  Earnings  Chart)
FRNT,Frontier Airlines Inc (Google  Yahoo  Earnings  Chart)
GFSI,Goldleaf Financial Solutions Inc (Google  Yahoo  Earnings  Chart)
GNSS,Genesis Microchip Inc Delaware (Google  Yahoo  Earnings  Chart)
GNTA,Genta Incorporated (Google  Yahoo  Earnings  Chart)
GPTX,Global Payment Tech Inc (Google  Yahoo  Earnings  Chart)
GRIN,Grand Toys Intl Inc (Google  Yahoo  Earnings  Chart)
HDTV,Spatialight Inc (Google  Yahoo  Earnings  Chart)
HEII,Hei Inc (Google  Yahoo  Earnings  Chart)
HEPH,Hollis-eden Pharmaceut (Google  Yahoo  Earnings  Chart)
HNBC,Harleysville National Cp (Google  Yahoo  Earnings  Chart)
HORT,Hines Horticulture Inc (Google  Yahoo  Earnings  Chart)
HOTT,Hot Topic Inc (Google  Yahoo  Earnings  Chart)
HRVE,Harvey Electronics Inc (Google  Yahoo  Earnings  Chart)
HTCH,Hutchinson Technolgy Inc (Google  Yahoo  Earnings  Chart)
HTRN,Healthtronics Inc (Google  Yahoo  Earnings  Chart)
IFC,Irwin Financial Corp (Google  Yahoo  Earnings  Chart)
IG,Igi Inc (Google  Yahoo  Earnings  Chart)
IMH,Impac Mortgage Holdings (Google  Yahoo  Earnings  Chart)
IMX,Implant Sciences Corp (Google  Yahoo  Earnings  Chart)
INFO,Metro One Telecommunications Inc (Google  Yahoo  Earnings  Chart)
INFS,Infocus Corporation (Google  Yahoo  Earnings  Chart)
INSM,Insmed Inc (Google  Yahoo  Earnings  Chart)
INVX,Innovex Inc (Google  Yahoo  Earnings  Chart)
IRN,Rewards Network Inc (Google  Yahoo  Earnings  Chart)
ISON,Isonics Corp (Google  Yahoo  Earnings  Chart)
ISWI,Interactive Systems Worldwide (Google  Yahoo  Earnings  Chart)
ITP,Intertape Polymer Group (Google  Yahoo  Earnings  Chart)
IVC,Invacare Corp (Google  Yahoo  Earnings  Chart)
IVD,Ivax Diagnostics (Google  Yahoo  Earnings  Chart)
JACO,Jaco Electronics Inc (Google  Yahoo  Earnings  Chart)
JDSU,JDS Uniphase Corp (Google  Yahoo  Earnings  Chart)
JRC,Journal Register Co (Google  Yahoo  Earnings  Chart)
JXSB,Jacksonville Bancorp Inc Il (Google  Yahoo  Earnings  Chart)
KIRK,Kirkland's Inc (Google  Yahoo  Earnings  Chart)
KT,Katy Industries Inc (Google  Yahoo  Earnings  Chart)
LCRY,Lecroy Corp (Google  Yahoo  Earnings  Chart)
LGVN,Logicvision Inc (Google  Yahoo  Earnings  Chart)
LRP,Lorus Therapeutics Inc (Google  Yahoo  Earnings  Chart)
LRT,Ll&E Royporation (Google  Yahoo  Earnings  Chart)
LXBK,Lsb Bancshares Nc (Google  Yahoo  Earnings  Chart)
LXRX,Lexicon Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart)
MBTF,Mbt Financial Corp (Google  Yahoo  Earnings  Chart)
MCEL,Millennium Cell Inc (Google  Yahoo  Earnings  Chart)
MDWV,Medwave Inc (Google  Yahoo  Earnings  Chart)
MECA,Magna Entertainment Corp (Google  Yahoo  Earnings  Chart)
MEDW,Mediware Info Systems (Google  Yahoo  Earnings  Chart)
MEG,Media General (Google  Yahoo  Earnings  Chart)
MFCO,Microwave Filter Co Inc (Google  Yahoo  Earnings  Chart)
MFSF,Mutualfirst Financial (Google  Yahoo  Earnings  Chart)
MHO,M/i Homes Inc (Google  Yahoo  Earnings  Chart)
MII,MicroIslet Inc (Google  Yahoo  Earnings  Chart)
MKTY,Mechanical Technology (Google  Yahoo  Earnings  Chart)
MNI,Mcclatchy Company (The) (Google  Yahoo  Earnings  Chart)
MODT,Modtech Holdings Inc (Google  Yahoo  Earnings  Chart)
MZT,Matritech Inc (Google  Yahoo  Earnings  Chart)
NABI,Nabi Biopharmaceuticals (Google  Yahoo  Earnings  Chart)
NASI,North American Scientifc (Google  Yahoo  Earnings  Chart)
NEOL,Neopharm Inc (Google  Yahoo  Earnings  Chart)
NFI,Novastar Financial Inc (Google  Yahoo  Earnings  Chart)
NGEN,Nanogen Inc (Google  Yahoo  Earnings  Chart)
NPSP,Nps Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart)
NTBK,Net.Bank Inc (Google  Yahoo  Earnings  Chart)
NTII,Neurobiological Technolg (Google  Yahoo  Earnings  Chart)
NTN,NTN Buzztime Inc (Google  Yahoo  Earnings  Chart)
OAKF,Oak Hill Financial Inc (Google  Yahoo  Earnings  Chart)
OCFC,Oceanfirst Fincl Corp (Google  Yahoo  Earnings  Chart)
OFG,Oriental Financial Group (Google  Yahoo  Earnings  Chart)
ONB,Old National Bancorp In (Google  Yahoo  Earnings  Chart)
ONH,Orion Healthcorp Inc (Google  Yahoo  Earnings  Chart)
OPOF,Old Point Financial (Google  Yahoo  Earnings  Chart)
OSCI,Oscient Pharmaceuticals Corp (Google  Yahoo  Earnings  Chart)
OUTD,Outdoor Channel Holdings Inc (Google  Yahoo  Earnings  Chart)
OVRL,Overland Storage Inc (Google  Yahoo  Earnings  Chart)
PANC,Panacos Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart)
PARS,Pharmos Corp (Google  Yahoo  Earnings  Chart)
PCBI,Peoples Community Bncrp (Google  Yahoo  Earnings  Chart)
PCYC,Pharmacyclics Inc (Google  Yahoo  Earnings  Chart)
PILL,Proxymed Inc (Google  Yahoo  Earnings  Chart)
PLI,Proliance International Inc (Google  Yahoo  Earnings  Chart)
PLUG,Plug Power Inc (Google  Yahoo  Earnings  Chart)
POTP,Point Therapeutics Inc (Google  Yahoo  Earnings  Chart)
PPK,Polyair Inter Pack Inc (Google  Yahoo  Earnings  Chart)
PQE,Proquest Company (Google  Yahoo  Earnings  Chart)
PRCS,Praecis Pharmaceuticals (Google  Yahoo  Earnings  Chart)
PRK,Park National Corp (Google  Yahoo  Earnings  Chart)
PTA,Penn Treaty American Corp (Google  Yahoo  Earnings  Chart)
PTIX,Performance Tech Inc (Google  Yahoo  Earnings  Chart)
PWOD,Penns Woods Bancorp Inc (Google  Yahoo  Earnings  Chart)
PXG,Phoenix Footwear Grp Inc (Google  Yahoo  Earnings  Chart)
PXLW,Pixelworks Incorporated (Google  Yahoo  Earnings  Chart)
QFAB,Quaker Fabric Corp (Google  Yahoo  Earnings  Chart)
RIVT,Riviera Tool Company (Google  Yahoo  Earnings  Chart)
RLRN,Renaissance Learning Inc (Google  Yahoo  Earnings  Chart)
RVP,Retractable Technologies Inc (Google  Yahoo  Earnings  Chart)
SCB,Community Bankshares Sc (Google  Yahoo  Earnings  Chart)
SCKT,Socket Communications (Google  Yahoo  Earnings  Chart)
SCT,Scottish Re Group Limited (Google  Yahoo  Earnings  Chart)
SEMIQ,All Amer Semiconductor (Google  Yahoo  Earnings  Chart)
SFP,Salton Inc (Google  Yahoo  Earnings  Chart)
SKYE,Skyepharma Plc ADS (Google  Yahoo  Earnings  Chart)
SNT,Senesco Technologies (Google  Yahoo  Earnings  Chart)
SPA,Sparton Corp (Google  Yahoo  Earnings  Chart)
SPC,Spectrum Brands Inc (Google  Yahoo  Earnings  Chart)
SRT,Startek Inc (Google  Yahoo  Earnings  Chart)
SSFC,South Street Finl Center (Google  Yahoo  Earnings  Chart)
STEN,Sterion Inc (Google  Yahoo  Earnings  Chart)
STG,Stonepath Group Inc (Google  Yahoo  Earnings  Chart)
STL,Sterling Bancorp (Google  Yahoo  Earnings  Chart)
SYBR,Synergy Brands Inc (Google  Yahoo  Earnings  Chart)
TAGS,Tarrant Apparel Group (Google  Yahoo  Earnings  Chart)
TECUB,Tecumseh Products Cl B (Google  Yahoo  Earnings  Chart)
TELK,Telik Inc (Google  Yahoo  Earnings  Chart)
TMTA,Transmeta Corporation (Google  Yahoo  Earnings  Chart)
TOA,Technical Olympic Usa Inc (Google  Yahoo  Earnings  Chart)
TRMS,Trimeris Inc (Google  Yahoo  Earnings  Chart)
TRPS,Tripos Inc (Google  Yahoo  Earnings  Chart)
TRST,Trustco Bank Corp Ny (Google  Yahoo  Earnings  Chart)
TSTF,Teamstaff Inc (Google  Yahoo  Earnings  Chart)
TUTR,Plato Learning Inc (Google  Yahoo  Earnings  Chart)
TWP,Trex Co Inc (Google  Yahoo  Earnings  Chart)
TWTR,Tweeter Home Entertainmt (Google  Yahoo  Earnings  Chart)
ULGX,Urologix Inc (Google  Yahoo  Earnings  Chart)
UWN,Nevada Gold & Casinos (Google  Yahoo  Earnings  Chart)
VDM,Van Der Moolen (Google  Yahoo  Earnings  Chart)
VERT,Verticalnet Inc (Google  Yahoo  Earnings  Chart)
VEXP,Velocity Express Corp (Google  Yahoo  Earnings  Chart)
VFL,Delaware Inv Fl Ins Muni Inc (Google  Yahoo  Earnings  Chart)
VIAP,Via Pharmaceuticals (Google  Yahoo  Earnings  Chart)
VIRL,Virage Logic Corporation (Google  Yahoo  Earnings  Chart)
VLNC,Valence Technology Inc (Google  Yahoo  Earnings  Chart)
VLTS,Valentis Inc (Google  Yahoo  Earnings  Chart)
VOCL,Vocaltec Communications (Google  Yahoo  Earnings  Chart)
VRA,Viragen Inc (Google  Yahoo  Earnings  Chart)
VSGN,Vasogen Inc (Google  Yahoo  Earnings  Chart)
WFBC,Willow Financial Bancorp Inc (Google  Yahoo  Earnings  Chart)
WFII,Wireless Facilities Inc (Google  Yahoo  Earnings  Chart)
WHI,W Holding Company (Google  Yahoo  Earnings  Chart)
WPL,Wp Stewart & Co (Google  Yahoo  Earnings  Chart)
WWVY,Warwick Valley Telephone (Google  Yahoo  Earnings  Chart)
XJT,Expressjet Holdings Inc (Google  Yahoo  Earnings  Chart)
ZANE,Zanett Inc (Google  Yahoo  Earnings  Chart)

around 40 stocks from the list are up 15% plus in last 65 days from their lows. So if you are value investor, you may find this approach useful. As always do your own testing and modification.

In fact while developing this method I found other very good methods and some of them might have lot of potential. One of them I am testing to see how it performs over past data and might get added to Episodic Pivot scans.

Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

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You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

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What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

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You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

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You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading site that offer free trail or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.

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