Using StockFetcher scans intraday

One thing I am experimenting with is using StockFetcher scans intraday to find trading opportunities that would realize themselves too late if they were discovered after market close. I can immediately think of 3 reasons to use SF scans this way:

1-  to look for strong stocks at the open that have pulled back and could become shorting candidates

2-  to look for liquid penny stocks that have made huge (>75%) gains in the morning and could become intraday shorting candidates

3-  to look for stocks going into the closing hour on the high of day to look for potential buys into the close

I have experimented with each of these before but now I will more systematically test each one and post follow ups on the results. One of the challenges with SF intraday screens is that the results are 20 minutes delayed so this may decrease the usefulness somewhat. If I find any of these screens particularly interesting or useful I will post the code that I use. I also welcome you to post in the comments any idea you may have for an intraday screen.

Another great reversal

Didn't even need to wait but one day for another amazing reversal. Called GA as it went crashing under 9 when I saw it with huge volume, clear red candles all the way down and man look at that reversal. This is a great play that I will use again and again. Also it seems that this pattern emerges best in stocks over $7.

(Aug 28-10:15) johnnyvento: GA big gap down, going under 9

(Aug 28-10:31) johnnyvento: GA already in 8.6's

I haven't been calling my exact entries and exits in the chat but will do so if anyone wants to follow, doesn't seem that other people were too interested in GA today, don't know why not but it wasn't the hot stock today. 

Different types of shorts are played differently

For the purposes of trading it is useful to distinguish between panic selloffs and breakdowns of stocks that have become overextended by one method or another. Both types of shorts begin on a green to red strategy but there is an important distinction. Panic selloffs happen very quickly with high volume but usually reverse intraday and can become longs off the rebound. This perfectly describes NWA today and although I was horrible at predicting the reversal (I said 8.60's but dropped to lod of 8.25) this even more proves my point, that the more overextended the stock becomes on the short side the more reliable the reversal will become.  Although much has been discussed about shorting off of premarket leader highs, not much is discussed about the exact opposite move- the long rebound off the panic selloff. Make a calculation about where the reversal is expected to happen using ADR5 as support and look for confirmation of 5% off the lod for entry. NWA scalp from 8.35-8.70 is the kind of trade the some of the more well known traders would scoff at, but this kind of trade should be added to your roster to make you more versatile and ready to respond in a variety of situations. Trading short from breakdowns of overhyped stocks is a great play- if it is your only play you will do well- but it is kind of like a basketball player that only has a 10 foot jumper, get some other plays in the playbook to become more well rounded.

Of course panic selloffs are also great shorts- this would have been a great trade when it broke 9 but I didn't see it until it was around 8.80 and decided to wait for the long.  I was wrong about the reversal- but that is the good news! Any move beyond the expected just gives added confirmation to the subsequent upward move. Turns out there was a natural support in the 8.50- 8.60 range where NWA traded sideways for quite a while. Notice how the huge red volume spikes couldn't move the stock lower than 8.50. You should always calculate where you are in the trade in terms of dayrange unless there is a news event driving the action, a news event causes the dayrange support/resistance guideline to become invalidated.

Trade Ideas

For anyone with the means to use it, I highly recommend using Trade Ideas as another tool in the kit for trading Muddy/13th style. Anyone who trades this way knows the importance of the Scottrade hod list and I find Trade Ideas to be the perfect supplement. Although Scottrade ended up being horrible for shorting the kind of stocks that the greenonthescreen chatroom likes to play, moving enough money over there to activate Scottrade Elite ($25,000 min) ended up being a good thing anyway- namely for Trade Ideas.

I've spent a fair amount of time trying to tweak the threshold parameters and I've finally settled on turning them all off. This gives me lower quality feeds but ultimately allows me to decide for myself the value of the information. Now it works just like the hod/lod list as an alert for my backfiltered combo stock list. As you can see from this picture the alerts happen simultaneously with the hod (see VSE come across on both).  However Trade Ideas produces several advantages. The first is simply that the list is rolling and can be scrolled back upon, unlike the hod list. If you miss a stock during the 2 seconds it is on the hod list you will not know until it comes up again. Trade Ideas also indicates the number of times it has alerted you on this stock so you will know how far into the momentum the trade is.

The second advantage, which I think is huge, is that the Trade Ideas alert gives the relative volume of the trading. On Wednesday HDLM came up as an alert with huge volume... I called at 10:40 only to find out that the awesome gboz had called it all the way back at 10:14! Nice heads gboz! Here is what the alert looked like and what made me pay attention:

HDLM ended up closing at 2.42 and moving even higher the next day.  

Get Trade Ideas if you can manage.

Trading in the morning

Although many people seem to like trading right at the open I find it to be the most tricky by a factor of ten. The old axiom that more money is made and lost in the first 30 minutes may be true but my job as a trader is to consistently make winning trades not necessarily to try and make the maximal amount of money every time out. That kind of thinking leads to bad trades because you will be tempted to enter trades where the risk/reward is no longer on your side.

Let's look at my ABK trade on Friday as to my thinking about how to assess the risk/reward. Here is the 5 minute chart:

The first rule for me is to give the stock 5 minutes to decide which direction it is going to go. From the first 5 minute candle on ABK we know there is trouble. ABK can't hold its early high of 5.45 and comes back down immediately to the 5.30 range. Whatever fueled the interest in ABK and caused the gap up from the previous day and the strong volume at the open, those orders are now filled. That's all I needed to see and was short ABK at 5.35 by 9:35. The second 5 minute candle confirms the loss of interest and the 3rd and 4th candle don't move out of the 5.30 range. There was a brief period where it looked like I was wrong but ABK quickly fell back to 5.35 and from there is was straight down to 5. 

What does a stock strong at the open look like? Here's NOBL recently:

A clean breakout from the open with no hesitation.

Likewise MTG from a few weeks back:

A buy after the opening 5 minutes on either of these stocks was a great trade- I see no reason to buy right at the open. Both of these stocks were premarket leaders because of news also. Stocks that are premarket leaders based on gap ups that aren't news based still may be strong plays but should be watched more carefully. Once they sputter they are usually done.

Another thing worth noting is that all of these plays were successful shorts and perhaps that is the safest play rather than the long. 

Is MITI the next SQNM?

Ever since the news came out about MITI, I've been secretly wondering whether this stock will become the next SQNM. MITI finished Friday solidly up in the week since its announcement.

Those looking for the SQNM breakdown waited for days for a shorting opportunity that never came. Meanwhile they missed out on a stock that moved from $9 to $22 in just a few weeks.

Most traders are cynical because that viewpoint usually proves the most accurate over a large number of predictions. Yet reflexive cynicism prevents traders from taking part in the most ideal play, the long breakout. What's worse is the automatic dismissal of all things biotech, when the traders have no idea of the science behind the news. The MITI news is based on this article in the top journal Science:

I've read the article and the science is actually pretty good. The scientists at MITI have found a way to induce cells called cytotoxic T lymphocytes to mount an immune response to cancer cells through the use of a specialized antibody. The publication of data like these in the most highly coveted scientific journal in the world in a rigorous if not downright cutthroat peer-reviewed process is a different matter than a fabricated press release and traders who cannot tell the difference may miscalculate the way to trade. Whether or not the stock holds up over the long term is a question only time can answer but don't be afraid to ever buy into the breakout of a biotech stock.

Deadly Combo

Once I saw how useful it was to be familiar with the stocks of the former runners I knew I had a lot of work to do. Just remembering them from seeing them run wasn't fast enough so I went to Stockfetcher and backfiltered the Deadly Combo scan that 13th_FLOOR has posted on greenonthescreen in his "I'm Gonna Try" post. I spent a whole weekend on it and came up with a list of about 500-600 stocks. The interesting thing that came out of it was seeing the ones that came up over and over again month after month. These I started calling "elite" combo stocks although any of them have the potential to take off. I haven't memorized the entire list but I use it as a filter for Trade Ideas. I'll write a separate post on that since I've set it up in parallel with the hod list so it functions as a hod/lod list just for combo stocks.

Brian from chat did the backfilter as well. He even neatly ranked them by number of appearances! His list is prettier than mine! 




This list is more than a month old so I'm sure RDN is at the top now. ABK and PMI were already near the top even before the recent financial volatility.

Quirks of the HOD list

Ever since I learned to keep my eyes constantly peeled to the Scottrade hod list, I started seeing symbols come across that weren't always at their high of the day. The hod list is so useful that it doesn't matter much about the errors but they do happen more often than one would think.  Here is an example- look at HBAN on hod list and on chart:

HBAN "hod" is 6.52 even though it hit 6.88 minutes earlier. You can see the 6.88 price in the High column on the watchlist as well as the chart.


It happens on the lod list too: check out BKUNA


BKUNA on the lod list at 2.41 even though it's nowhere near its low of 2.13.

Using dayrange as support and resistance

This may be be obvious to some people but I have to say that when I figured it out it was something of a revelation. Instead of using fixed price points for support and resistance I use statistical day range. To do this I look at the average day range over the past 5 days (ADR5) as of the previous day and convert that into dollars and cents. The range is then calculated from the open price. Let's take a look at some intraday charts as examples.

Here's ABK from Friday:




ABK opened at 5.70 (I will usually round to the nearest dime) and its ADR5 as of Thursday was about 15%. That gives us about 85 cents to work with. ABK traded sideways in the morning and didn't look interesting. However if you went long in the afternoon at 5.50 on increasing volume like I did then you need to subtract out the .50 that ABK gave up in the down move to 5.20. This means that it only has .35 to give on the upside above 5.70 to 6. So this trade at 5.50 I expected to get .50 at the most. This is different that the red and green terms that are calculated using previous day close. ABK was "green" all day since it gapped up but at the break even point of 5.70 it had used up 9% of its dayrange already
(5.70-5.20=.50/5.70=9%).


Here is another example from last week- WM





During this week WM had an ADR5 of around 10 so a short below 5 on red from the open on Fri August 8 should be watched close around 4.50. By August 12 the price had reset to 4.60 so it had about .40 to give down to 4.20. By looking at this chart you can see that fixed resistance points don't seem to have any meaning. Looking at the daily chart shows no insight as to support and resistance levels.




Of course the stocks don't always adhere to these calculations but the point is that I watch these points close and take reversals around these points very seriously. I'm usually out at the first sign of a reversal. But if the stock keeps going beyond it, all the better!

Penny Stocks

Unlike many people who come into the greenonthescreen chatroom from elsewhere I don't like to focus too much on penny stocks. However I do have a penny filter that I scan daily that I think is useful.


where close is above open and price is above upper bollinger band(20)
and volume is greater than 100000
and price is between .0001 and 1
and volume is 300 percent above average volume(90)
and rsi(2) is greater than 90
and average day range(5) is greater than 3
add column average day range(5) {adr5}
add column average day range(10) {adr10}
add column average day range(30) {adr30}
sort by column 4 descending

This scan is useful precisely because it is very stringent. I tweaked it down from 500% increase because that was eliminating almost everything. Still it only picks up a good play every week or two at the most. The chart has to be perfect, meaning 3 days up with steadily increasing volume. Let's look at some charts for some successful plays from this filter.

First up: FRTL




FRTL came up on the day I wrote the filter. It is really nothing more than the concepts that 13th taught me although I had not applied it to pennies before. I mentioned FRTL to 13th_FLOOR in an after hours chat over the weekend. To be honest I wasn't sure this would be a good play and jumped in it way late. Of course 13th played it perfectly getting in at the open. From then on however I knew this would be a good penny filter.

The next ideal play that came up was VCSY.




By the time VCSY came around I was ready. 

Another good one is GFET



As you can see these kinds can stay in play for several days although 1 day is all I expect to get out of it.

And finally IMDS




As you can see these were some great plays but they don't come around that often. Another important point is that once they are done I don't look at them anymore. As you can see FRTL came up again in the scan but the conditions were not ideal so I ignored it. The volume was down and the long upper wick is a bearish sign. Best left alone.

I will try to post some of the watches from this filter as they come up.

The Gap Stat calculator

Is it possible to predict gaps in advance? I’ve been working on this question for a while. Although there are many gap filters on Stockfetcher, none of them are useful in my opinion. What I want to know is how the stock I’m currently holding performs historically on gaps or how the stock I’m looking to buy into the close performs under a given set of conditions. Well thanks to my friend SlowPoke I now have a Gap Stat calculator. This filter is used as a calculator to check an individual stock's performance rather than scanning for stocks that meet the criteria. To use it just put in the stock symbol that you are interested in and the percent gain and loss for performance in the first and second lines of code.
Here is the code using RDN and 10% gain/loss as an example:

symlist (rdn)

set {gain_threshold, 0.10}  /* 20% gain */

set {drop_threshold, 0.10}  /* 20% drop */

set {ClOp , close  - open}

set {ClOpPct , ClOp / open}

set {OpCl , open - close}

set {OpClPct , OpCl / close}

set {met_threshold_Yesterday , count(ClOpPct 1 day ago >= gain_threshold,1)}

set {met_down_threshold_Yesterday , count(OpClPct 1 day ago >= drop_threshold,1)}

set {gapped_up_today , count(open > close 1 day ago,1)}

set {gapped_down_today , count(open is below close 1 day ago,1)}

set {met_threshold_then_gapped_up_today , met_threshold_yesterday * gapped_up_today}

set {met_threshold_then_gapped_down_today , met_threshold_yesterday * gapped_down_today}

set {met_down_threshold_then_gapped_up_today , met_down_threshold_yesterday * gapped_up_today}

set {met_down_threshold_then_gapped_down_today , met_down_threshold_yesterday * gapped_down_today}

set {met_threshold ,count(met_threshold_yesterday >= 1,100)}

set {then_gapped_up , count(met_threshold_then_gapped_up_today >= 1,100)}

set {then_gapped_down , count(met_threshold_then_gapped_down_today >= 1,100)}

add column met_threshold

add column then_gapped_up

add column then_gapped_down

set {met_down_threshold , count(met_down_threshold_yesterday >= 1,100)}

set {down_then_gapped_up , count(met_down_threshold_then_gapped_up_today >= 1,100)}

set {down_then_gapped_down , count(met_down_threshold_then_gapped_down_today >= 1,100)}

add column met_down_threshold

add column down_then_gapped_up

add column down_then_gapped_down

chart-time 105 day

draw met_threshold_yesterday

draw met_down_threshold_yesterday

We can see from these results that RDN gapped up 8 out of 10 times it gained 10% in the past 100 days. Interestingly, it lost 10% 23 times and still gapped up 17 times and only gapped down 5 times on a 10% loss. RDN is a gap upper. On the other hand a stock like DAL is much less reliable. In the past 100 days it has gained 10% 6 times and only gapped up 2 of those times and gapped down 4. Hopefully you will find this filter as useful as I do in your end of market decision making.

**UPDATE

This has been the source of some technical difficulties. If you cannot successfully cut and paste this into StockFetcher then email me at johnnyvento@gmail.com