All,
I thought I'd share something I've been watching for some time now. I've mentioned here that I run several scans against the entire market. I do this 2-3 times a week.
My favorite scan finds stocks making new 6 month price highs, accompanied by confirming OBV. At first, I thought these could just be bot outright for a quick 10%. Many times this is true.
But, I think I've found something that may be more reliable. Often, but not always, these stocks will falter after posting new highs. They rarely roll over, but I think the faltering is caused by those who bot earlier, saw price fall away from their entry and are now quick to take profits on the new high.
Once those people are out of the way, I believe there are many out there who are watching this same phenomenon. Once price comes back to a trendline, or the short MAs, and shows a bounce, this often will produce a better short term buy signal.
Here are a few stocks that showed new price/OBV 6 month breakouts following the close on 12/31/98. Note the falter and bounce. Jot down the symbols and I'll give you one link to timely with the first one.
ADI: timely.com
Here are 3 more: CLFY, ENZN and MRCY
Note stochastic on ADI. Also, OBV remains very near the 6 month high, meaning this stock is stronger at these lower price levels than it was at the high. Bullish. MACD is firming above zero. RSI has turned back up and broke a short falling trendline.
Same story for CLFY (word for word).
Nearly the same for ENZN, but stochastic hasn't fallen off much. The other indicators are very strong, so this may be a situation where stoch is just going to linger at the upper end.
Finally, MRCY shows much the same stuff, except that OBV has fallen off a little stronger than is so on the others.
Also, if you haven't already noticed, timely, in its wisdom, has chosen to just duplicate Friday's prices as a proxy for Monday (a market holiday). I don't like this a bit as it has a visual impact on the chart that adds nothing. Just be aware of it.
This particular scan filtered for lower priced stocks and do not fit the BTTT mold because of that. As usual, comments welcome.
Ken |
