5/7 Scan

All the signals I encountered today were on stocks whose parabolic sar had been poisoned by Thursday's computer-driven panic, which distorted the daily lows by 10% or so.

In the lists that follow, I'll include the macd information, which remains valid, since it only using daily closes, in discussing the counter-trend items.


Bull signal, weak trend: FRX.

Bear signal, counter-trend:

• FISV. The price was in an uptrend through late April, and has moved sideways with a gap down on the earnings announcement. No clear price downtrend has been established. The macd is in bear phase but rising slowly toward the zero line.
• JKHY. The macd is in bear phase and declining sharply.

Bear signal, weak or marginal trend: ADCT, ESRX and GIS.

How the scan is done:

I scanned all optionable stocks and exchange-traded funds priced at $5 or greater and showing volume of 1 million shares or more at the time of the scan, about 1:30 p.m. Eastern.

Stocks with earnings to be announced in the near future were excluded from further analysis.

To be considered for the Watchlist, the signal must be in line with the broader trend as seen on a three-month daily chart, with ambiguity resolved by looking at charts spanning three years or more.

The strength of the trend is determined by the average directional index. I consider a reading of 30 or more to be sufficient strong for the Watchlist. I rate a reading below 20 as weak, and below 30 as marginal.

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The Investor's Guide to Active Asset Allocation: Using Technical Analysis and ETFs to Trade the Markets

Martin Pring's detailed deconstruction of the economic cycle: What sorts stocks to look for at each stage of the recovery. A masterful analysis.

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Skynet Panic of May 6
Panic Looks Like This
Skynet Panic Poisons Technical Tools

Also on Private Trader:

• Friday's Almanac
• Stocks Morningline
• Other Indicators Morningline
• Holdings Morningline
• Friday's Forex
• X Watch
• Friday's Scan
• Stocks Watchlist
• Forex Watchlist

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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