A simple scan to find big winners | stockbee


A simple scan to find big winners

Most stocks start their swing move or big move with a 4% breakout. You can validate this for yourself by looking at every big winner last year.A 4% move kicked of this REN move and each subsequent swing move was preceded by 4% b/o

A 4% move kicked of this MPET move and each subsequent swing move was preceded by 4% breakout. A simple scan can find you stocks like these.

A 4% move kicked of this AKAO move and each subsequent swing move was preceded by 4% b/o

Stock moves start with a momentum burst and that basic tendency of the stock moves has not changed since stock markets started.

If you just do a good job of focusing everyday on 4% breakout you will find the best opportunities in market every week.

To find stocks like these I run a very simple 4% breakout scan:

c/c1>=1.04 and v>v1 and v>100000

c= close today
c1= close yeserday
v= volume today
v1= volume yesterday

It finds stock that had a price and volume surge today. What the scan means is :

The stock should be up 4%,

volume should be higher than yesterday

and volume should be greater than 100000.

Once you run the scan you will get several stocks meeting the scan conditions , but they are all not buy candidate.

A buy candidate should meet the setup definition for a breakout swing trade. If the context of the breakout is right , it should be bought for 3 to 5 day hold trade.

A good setup should show following characters:

stock should close near high

prior to b/o day there should be a narrow range or negative bar

stock should not be up 3 days in a row

stock should have a narrow range sideways consolidation or narrow range orderly shallow pullback prior to b/o day

the previous leg of up move should be linear

the breakout should be first to third setup since start of the move

as far as possible look for young trend and not extended trend ( youngsters defined by number of days stock has been rallying in overall move)

first and second pullback/consolidation in rally are preferable

extended rallies are vulnerable to correction and breakout failure

In process term I run the above scan from 9:30 onward and look for candidates meeting setup definition. As and when they show up I enter. The stop is low of the breakout day.

If you are serious about making money swing trading you can setup the scan yourself and study several big movers in recent days and last year and see for yourself how the scan would have found them on first day of their move.

If you use this scan daily you will find most big moves right at their start day. 

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