How to find stocks with momentum

If you are short term swing trader, you need to be in stocks with momentum. Easy way to find such stocks in Telechart is by running a six month and two month momentum scan to generate a list of stocks.

In Telechart set up following PCF:

Six Month momentum

C / AVGC126

Two month momentum

C / AVGC42

Volume 3 days

MINV3.1 > 1000

In easyscan set up 2 easyscans

Six month momentum

Common Stocks

Six month momentum PCF set to list Rank >97

Volume 3 days =true

Price per share>3

Two Month Momentum

Two month momentum PCF set to list Rank >97

Volume 3 days =true

Price per share>3

Now look at the stocks in these two lists. These are the stocks currently favored by the market. To find trades from this you can sort the scan output by Price Percent Change 5 days and look at stocks with less than 5% price change in last five days. Those stocks are having a small pullback in their strong trend.

Here is a example of a quick swing trade on BEXP using this kind of momentum approach:

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6 comments:

renu said...: Hello,

could you please tell what are the signs of topping out of market as market always gives early signs before a fall.

Thanks; Sep 15, 2009, 4:03:00 AM
Pradeep Bonde said...: When breadth reaches extreme there is a probability of correction.; Sep 15, 2009, 8:13:00 AM
jdno said...: Can you tell me what this part of the TC2K code does, or is there a syntax error here:

Volume 3 days =true

Thanks; Sep 15, 2009, 10:35:00 AM
Pradeep Bonde said...: MINV3.1 > 1000
Means the volume in last 3 days prior to today was higher than 100000.; Sep 15, 2009, 10:41:00 AM
Renu said...: Hello sir,

could you plese tell how to write your momentum stock finding formula for amibroker.
thanks; Sep 23, 2009, 1:05:00 AM
Pradeep Bonde said...: I do not use Amibroker. You can convert it in to Amibroker by understanding the logic of the scan.; Sep 23, 2009, 6:01:00 AM

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