Nine and ½ Weeks
The
Nine and ½ Weeks scan finds stocks that are today breaking out to new
intermediate-term lows on high volume. There are two ways to trade based
on this scan:
- If the stock is breaking down from consolidation,
then our bias for any trading is bearish.
- A stop may be placed at the higher of today's
high or yesterday's close
- If the stock fell before consolidating, then
i. The target
may be made as usually with a technical breakout: A + B - C where
A = The breakout price
B = The lows of
consolidation
C = The highs before the
stock fell into the consolidation area
- If the stock did not rise before
consolidating, then
i. The target
may be made as usually with a technical breakout: A + B -C where
A = The breakout price
B = The lows of
consolidation
C = The highs of
consolidation
- If the stock has been falling for some time,
and gapped up today, then we may trade it in a similar fashion to Bottom
Fisher trades.
- A stop may be placed at:
Today's low
The lowest price of the past several
days
An intraday resistance level
- The target price may be set at:
The high before the decline began
A resistance trend-line
We have created two very similar scans. One scan is to be
run early in the morning. The other scan is to be run later in the
day. We have created two scans because comparing today's volume to
average volume requires taking into consideration what time it is.
First
Hour
MAV20
> 100000
LastTrade
> 5
LastTrade
< MIN40_1
DayVolume
> MAV20 * 0.75
After
the First Hour
MAV20
> 100000
LastTrade
> 5
LastTrade
< MIN40_1
DayVolume
> MAV20 * 1.25
Modifications
We
believe that the scan can be improved by segmenting it into breakout and a
reversal scans.
Nine
and Half Weeks Breakout Scan:
MAV20
> 100000
LastTrade
> 5
LastTrade
< MIN40_1
DayVolume
> MAV20 * 0.75 (changed to 1.25 after the first hour)
LOW5
> MIN40_1
LOW4
> MIN40_1
LOW3
> MIN40_1
LOW2
> MIN40_1
LOW1
> MIN40_1
Our
modifications ensure that the stock has not been making new lows recently; this
increases the probability that it has been consolidating.
Nine
and Half Weeks Reversal Scan:
MAV20
> 100000
LastTrade
> 5
DayOpen
< MIN40_1
DayVolume
> MAV20 * 0.75 (changed to 1.25 after the first hour)
LastTrade
> CLOSE1
This
modified scan looks for stocks that gapped down to 40-day lows, and are now
trading above yesterday's closing price; this is similar to the Bottom Fisher
scan, except that it looks for poor performance over a longer period of time.
Example
Here's
an example of a successful trade that could have been taken using the Nine and
a Half Weeks Breakout Scan:
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