Three Days Up: Price And Volume

This week, Kevin Matras goes over a price and volume screen for finding stocks on the move, NOW!!! Read on and get 3 new stock picks.

With the market going back and forth (and up and down) lately, here’s a simple screen for finding stocks on the move NOW!!!

I use this screen regularly to help me find what stocks are hot, what stocks are not, and what stocks may be gathering momentum. This screen looks for stocks that have shown three days worth of increasing prices accompanied by three days worth of increasing volume.

I have found that stocks that meet these criteria have a tendency to continue to move in that same direction. Why? Because price has a tendency to follow volume. For instance, if a stock’s falling on increasing volume, it could be a sign that people are getting out, and that new shorts (bets that a stock will go down) are being put on.
Likewise, if a stock is moving higher on increased volume, it can be a sign that new buyers are coming in (maybe with more conviction), and some short sellers may be giving up (buying back their bets for lower prices).

The parameters for this are easy:

  • Current Price > Price 1 Day Ago
  • Price 1 Day Ago > Price 2 Days Ago
  • Price 2 Days Ago > Price 3 Days Ago
  • Current Volume > Volume 1 Day Ago
  • Volume 1 Day Ago > Volume 2 Days Ago
  • Volume 2 Days Ago > Volume 3 Days Ago

It’s applied to stocks that are trading within 20 percent of their 52- week high. Additionally, they’re >= $5, and have a minimum of at least 50,000 shares traded daily.

I love this one, largely because instead of focusing on just the biggest gainers (which often are one day events that have been missed), this spots price momentum AND accumulation. Very bullish signs.

Here’s a few of the stocks it picked for 1/15/08:

ABAX Abaxis, Inc.
CHDX Chindex International, Inc.
HMSY HMS Holdings Corp.

This screen is available in the Research Wizard by going to:

Screen
Open Screen Definition
Double-click: the SoW folder
Select: sow_3_days_up_price_vol

Use the Research Wizard to run this screen on your own, or any of the other proven, profitable strategies that come with the program.

And learn how to create and test your own winning trading strategies that tell you when to buy and when to sell. It’s easy to do. Sign up now for your two-week FREE trial to the Research Wizard, and start making better decisions today. http://researchwiz.zacks.com

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

TAGS: Archive
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish