EWZuber
1,373 posts
msg #28935
- Ignore EWZuber |
9/28/2003 4:42:38 PM
These filters are designed to look for stocks that are overbought on Weekly and daily charts and have had fast line cross overs below the slow line.
It also looks for overbought stocks that have come up against resistance at a moving average but could not break through consequently they are breaking down which has caused a longer term distribution phase to begin.
It is the distribution that brings price down. More shares up for sale than buyers for them. The price then drops in order to attract a buyer. This is distribution.
Show stocks where Weekly Slow Stochastic(5,3) Fast %K crossed below Weekly Slow Stochastic(5,3) Slow %D within the past 2 weeks and Weekly and Slow Stochastic(5,3) Fast %K crossed below Slow Stochastic(5,3) Slow %D within the past 2 days and close touched MA(15) from below within the last 1 day and Average Volume(30) is above 100,000 and Volume is above 100,000 and price is between 5 and 250.
Today this screen produced DSCO which has tested trendline resistance and bounced down from it twice before. Daily chart stochastics fast line just converged with the slow line, indicating it is highly likely that a new distribution phase is beginning.
Because the NASDAQ distribution phase is just beginning there won't be a lot of stocks that are testing resistance from below.
Most will be breaking through support at this point. So here is an alternative screen that looks for stocks breaking through support but are still overbought, giving plenty of room to fall further.
Show stocks where Weekly Slow Stochastic(5,3) Fast %K crossed below Weekly Slow Stochastic(5,3) Slow %D within the past 2 weeks and Slow Stochastic(5,3) Fast %K crossed below Slow Stochastic(5,3) Slow %D within the past 2 days and Slow Stochastics(5,3) Fast %K is above 60 and where Close is below MA(15) and
Average Volume(30) is above 100,000 and volume is above 100,000 and close is between 5 and 250
This one produced some excellent candidates. Looking at the returns, surprisingly many of these stocks are testing the 15 DMA as resistance.
The only reason that the 15 DMA was used is because the markets are just coming off a very bullish run and most stocks were above their 15 DMAs.
As the Monthly distribution cycle gets more advanced the 25, 50 100 & 200 DMAs will become more useful in these filters.
This one is an adaptation of a vetry excellent bullish filter that someone else here on SF designed. I have added stochastics, changed the volume parameters and turned it into a bearish filter and it looks real decent, IMO. Even backtesting it well before the recent drop in the markets returns impressive results.
SHOW STOCKS WHERE SLOW STOCHASTICS(5,3) FAST %k CROSSED BELOW SLOW STOCHASTICS(5,3) SLOW %D WITHIN THE PAST 2 WEEKS AND WHERE THE CLOSE 3 DAYS AGO IS ABOVE THE CLOSE 4 DAYS AGO AND VOLUME 3 DAYS AGO IS LESS THAN VOLUME 4 DAYS AGO AND CLOSE 2 DAYS AGO IS ABOVE THE CLOSE 3 DAYS AGO AND VOLUME 2 DAYS AGO IS LESS THAN VOLUME 3 DAYS AGO AND CLOSE 1 DAY AGO IS ABOVE THE CLOSE 2 DAYS AGO AND VOLUME 1 DAY AGO IS LESS THAN VOLUME 2 DAYS AGO AND THE CLOSE IS BELOWTHE CLOSE 1 DAY AGO AND CLOSE VOLUME IS ABOVE 100,000 AND CLOSE PRICE IS BETWEEN 5 AND 250.
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EWZuber
1,373 posts
msg #28995
- Ignore EWZuber |
10/2/2003 6:52:23 PM
Thanks to SF I changed the wording on this short filter and it works great now.
One parameter does still need to be screened by hand and that is to make sure that Monthly chart stochastics have also had a fast line cross below the slow line so this Monthly periodicity time frame is in distribution also.
SHOW STOCKS WHERE WEEKLY SLOW STOCHASTICS(5,3) FAST %K CROSSED BELOW WEEKLY SLOW STOCHASTICS(5,3) SLOW %D WITHIN THE PAST 2 WEEKS AND WEEKLY SLOW STOCHASTICS(5,3) FAST %K IS ABOVE 50 AND CHART IS WEEKLY AND WHERE THE CLOSE 3 DAYS AGO IS ABOVE THE CLOSE 4 DAYS AGO AND VOLUME 3 DAYS AGO IS BELOW VOLUME 4 DAYS AGO AND CLOSE 2 DAYS AGO IS ABOVE THE CLOSE 3 DAYS AGO AND VOLUME 2 DAYS AGO IS BELOW VOLUME 3 DAYS AGO AND CLOSE 1 DAY AGO IS ABOVE THE CLOSE 2 DAYS AGO AND VOLUME 1 DAY AGO IS BELOW VOLUME 2 DAYS AGO AND THE CLOSE IS BELOW THE CLOSE 1 DAY AGO AND CLOSE VOLUME IS ABOVE 100,000 AND CLOSE PRICE IS BETWEEN 5 AND 250.
I looked back at some of the returns it gave and the set ups were exactly what I was looking for.
The returns that back test in the green are stocks that are still in accumulation on Monthly peroidicity charts. Thats why this parameter needs to be checked by hand.
For instance I back tested for 11 days and it brought up FBN.
Looking at the chart the stock rose from 9/12 to 9/17 on successively lower volume and closed lower on the 18th on higher volume.
Starting the 18th the Monthly, Weekly and Daily chart stochastics were in phase in distribution.
The stock at this point was highly predictable and made a nice 10% drop over 10 days. The trend will very likely be down for a quite a while. JMHO
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