Short term swing trading candidates are based on the phenomenon of range expansion. When a stock has range expansion preceded by periods of range contraction, there is a good probability that the stock will move in direction of that range expansion for next 3 to 5 days.
CNTY is recent example of that. Stock was in confirmed momentum phase and 4 days ago had range expansion. Since then it is up around 15% in 4 days. Prior to range expansion stack was in consolidation mode.
These moves can be small moves or explosive moves depending on market conditions, size of stock, float of stock, short interest , price of the stock or sector trends.
Some of the range expansion can be anticipated and that offers low risk entry points , however many range expansion surprise market and the stock moves in direction of range expansion.
Everyday I run 3 bullish and 3 bearish scans to look for range expansion setup that offer good risk reward setup. Obviously on most days there are lots of them but only handful of them are worth risking money. You also need to check for earnings date before taking trade.
Some of the better looking long and short setups from Friday's scan are:
Bullish Candidates
- MGAM
- GASX
- PNK
- RMTI
- ASTX
Bearish Candidates
- MRO
The list will be published daily for readers of the blog.
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