Stock Charting
Stock Screening
Stock Research
Stock Charting
Stock Screening
Stock Research
This example gives stock charts that show the last trading price just crossing up through the upper 20 day Bollinger Band. When viewing the charts, look carefully at the last few days of trading and how the price has passed above the Bollinger Band. This is an excellent screening criteria to quickly find stocks that are showing breakouts from an established price trend. ChartSmart allows you to screen out stocks breaking above the upper band or below the lower band. Of course this list changes daily giving you a continuous pool of stocks to choose from.
The Bollinger Bands are the key to the success of this filter set. In this case we are using a 20 day Bollinger Band. Bollinger Bands are basically an envelope that follows the simple 20 day moving average of the stock. What makes the envelope unique is that it's distance from the moving average is based on the standard deviation of the price from the moving average value. Although it may seem a bit confusing, the standard deviation is much better than a simple envelope where the upper and lower bands are equal distants from the moving average line. Instead the upper and lower bands tend to hug the moving average line as the price volatility decreases ... that is it heads in one steady direction. It is only when there is some significant price activity that the price breaks above the upper band and this filter catches these stock quite well.
This filter example applies to the 3 main US exchange being the New York, NasDaq, and American. Also the last trading price has been specified to be within 30% of the 52 week low. This way, any channel breakouts are occuring at the bottom of a cycle.
Click on the images to enlarge them.
How to Screen Out these Stocks with ChartSmart
The channel breakout for this example is set so that the last trading price is equal to or above the upper band. This is a setting of 100 (100% above the lower band or higher). When this filter list was originated it generated about 40 stocks on the 3 exchanges. When you look at the charts you should turn on the 20 day Bollinger Band indicator so you can see the breakouts. If the duration of the Bollinger Band is shortened (eg. 10 day) then the sensitivity of the bands will be much higher making it more appropriate for short term trading.
After you have clicked on RUN FILTERED LIST and created your filter list, close the Filter Menu and go to the Charting Menu. Next click on the GRP button and then use the FORW button and BACK button to scroll through the charts in your filtered list.
Watch the video of this strategy.