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Dave Landry's Long Trading Strategy

This scan is based on Dave Landry's simple pullback from a new two-month high trading strategy.
1. A stock makes a new two-month high.
2. Next, the stock pulls back two to seven days with consecutive lower highs.
3. When the stock finally makes a higher high, which would be the "pivot" price bar, you have two choices. You can go long on the "pivot" price bar if it is a strong price bar (closing near the high of the day), providing the overall market is in a strong uptrend, or you can wait until the next day and put in a buy order ten cents above the high of the "pivot" price bar.
4. Once the order is filled you put a protective stop .35 cents under the low of the "pivot" price bar. I never risk more than -4% on any trade.

That is it, but I have taken it to a higher level of what I call a "safer trade."

Here is the criteria:
1. The overall market must be in an uptrend.
2. The Sector the stock is in has to be in an uptrend.
3. The industry the stock is in has to be in an uptrend.
4. The stock's ADX has to be above 25.
5. The MACD(12,26,9) Histogram has to be moving higher.
6. The stock's price has to be above zero on the MACD(1,65,1) or above the 65-Day EMA.

I Use the Elder Impulse charts. The chart I use has the ADX, MACD(12,26,9) Histogram and MACD(1,65,1) on it.

I use Elder Impulse charts for stocks, Industries, Sectors and Indexes. The ADX tells me the strength of the 'trend' (most be above 25), the MACD(12,26,9) Histogram measures the 'momentum', the MACD(1,65,1) tells me the 'long-term' trend (the long-term trend is up when the price is above zero), and the 13-Day EMA identifies the 'short-term' trend.

Here is the chart I use:
http://schrts.co/cmPZQIRp

Before I use the scan I already know which Sectors and Industries I am looking for the stocks the scan brings up. I do that by using this chart for my "Industry Summary" chart and my "Market Summary" chart:
http://schrts.co/vPtVfUsU

Below is the scan.

[type=stock]
and [country is US]
and [Low > 25.00]
and [Volume > 200,000]
and [SCTR >70]

and [ [[3 days ago high = 3 days ago max(251,high)]
and [Streak Down(high) = 2]]
or
[[4 days ago high = 4 days ago max(251,high)]
and [Streak Down(high) = 3]]
or
[[5 days ago high = 5 days ago max(251,high)]
and [Streak Down(high) = 4]]
or
[[6 days ago high = 6 days ago max(251,high)]
and [Streak Down(high) = 5]]
or
[[7 days ago high = 7 days ago max(251,high)]
and [Streak Down(high) = 6]]
or
[[8 days ago high = 8 days ago max(251,high)]
and [Streak Down(high) = 7]] ]

Comments

  • Is your group for the scan the Industry group(s) with the highest 2 month performance showing on the Industry summary?
  • I'm sorry, but I don't understand your question.
  • You mentioned that you identify your sectors or industries first, using the Industry and Market Summary. My question was if you add these industries to your scan. As your scan code reads, it currently looks at all industries and sectors and markets, without concern to them being leading or lagging.

    Something you may find of use is adding a Rank by statement at the end of the scan. Something like

    RANK BY [PctRelative(20,$spx)]

    You can change the number, right now it shows 20 days in the expression, to be longer or shorter. You can also change the $spx to be whatever index or symbol your would like to use as the RS comparison symbol. You can even use $Sector or $Industry in that position.

    Using the Rank By function is a fun way to introduce another element into the output file of the scan.

  • I have all the industries and indexes in 4 different lists because you can only get RRG results on fifty at a time. I view the lists in RRG and then I mouse-over the industries in the LEADING Group to see the charts. That's how I find the LEADING industries I am interested in.

    I also use the Industry web page where I quickly look through the industry charts looking for the ones that are over ADX 25 and are not overextended or the ones that have pulled back and might be ready to have another leg up.

    I also use the daily RRG and bring up the industry group with their stocks that I'm interested in and do a mouse-over the stocks in the LEADING group looking for the ones that aren't overextended and might be prospects.

    I like looking at a lot of charts.

    The scan is just another way to find some extra stocks to have as long prospects providing they are in the industries I am presently interested in and they look like they are set up to go higher.

    I started a Public Chart list a couple of weeks ago. There I have the stocks I own and the ones that are prospects.

    Public Chart List
  • Thanks for sharing your scan.

    As @lmkwin points out, "rank by" is a very useful scan option. It may save you a lot of chart time.

    For instance, assuming you have a list for the 104 $DJUS industries, you could do

    [favorites list is ??] // your $DJUS industry list
    rank by ADX(?)

    In the result list, the ADX value will display. Note the chart where ADX closes below 25. Put the results in a scratch list, saving the order. Review the charts until you hit ADX < 25. (Or, you can download the results to Excel, delete rows for ADX values under 25 and re-upload the remaining symbols to an empty list using the "many" option on the lists Edit view.)

    You can also get top performers with either "rank by SCTR.industry" or "rank by ROC(??)".

    SCTR merges long, mid and short term performance, so it can obscure newly emerging stocks/industry symbols.

    For ROC(??), longer values also obscure recent action, but 3 months seems to be a reasonable compromise (ROC(63)).
  • This is part of my trading strategy:

    First, I identify the Industries that have charts that are over ADX 25 and in an uptrend.

    Next, I create a Relative Rotation Chart (RRG) which I update regularly. I bookmark this chart. Then whenever I update the chart, maybe removing or adding Industry symbols, I then just bookmark the new chart again.

    This is a daily RRG Chart for swing traders.

    Included on the chart are the following:
    1. S&P 500 Large Cap ($SPX)
    2, S&P 600 Small Cap ($SML)
    3. Nasdaq Composite ($COMPQ)
    4. The eleven S&P 500 Sector ETFs
    5. The leading Industries that have an ADX over 25 and in an uptrend.

    The results are rated LEADING, IMPROVING, WEAKENING and LAGGING.

    The LEADING INDUSTRIES is where I search for stocks to buy when the overall market is in an uptrend and the Industries are in a LEADING SECTOR.

    If you clear the symbols at the top of the chart results page and use the "Groups" drop-down, you can select an individual Sector and get the stocks within it. The Industry is listed after the stock in the results. Then you focus on the stocks that are rated LEADING within the LEADING Industry you are targeting. Make sure you use the"Daily"
    option for the time period.

    Here is the URL for the RRG Chart: https://tinyurl.com/vzt7spc
    (Refresh the web page if the chart is blank.)

    If you are not getting the correct chart then enter the following symbols and set the time period to "Daily."

    $DJUSID,$DJUSSW,$DJUSAG,XLRE,XLC,XLB,XLE,$DJUSCR,XLF,XLI,$DJUSAI,XLK,XLP,$SML,XLU,XLV,$DJUSFE,XLY,$SPX,$DJUSRR,$DJUSSB,$DJUSDS,$DJUSHP,$DJUSBK,$DJUSHR,$DJUSSC,$COMPQ,$DJUSBT,$DJUSSF
  • P.S. - to see the complete page for the URL, you need to be logged in to Stockcharts.
  • I realize that. That's why I listed the symbols.

    But once you bookmark the page it stays the same (providing you are logged on to StockCharts.com), and then you can edit it and then just bookmark it again as a new page.

    One of the best features of StockCharts.com is the ability to see your stock lists as RRG charts. I set mine to "Daily" because I only swing trade. My average hold time is often under 7 days.
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