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Scanning for stocks to short (entering a downtrend or in a downtrend)
Since we have been in an uptrend until recently, I have developed several scans that look for stocks to buy. Now that we are in a downtrend, I want to develop some scans to look for stocks to short, something new to me.
I have tried several scans, most of them based on Stockcharts pre-defined scans, such as Bearish 50/200 MA cross, moved below lower Bollinger Band, 52 week low, etc. I also looked at several SCTR scans, and other bearish scans in Sample Scans, Gord's Greer Scan building blocks, etc. The biggest problem I found was that the results produced were too late, meaning the downward trend had already started days, if not weeks ago.
I decided to try a simple 50 SMA crossing over a 20 EMA, which produced the best results so far. Here is the scan:
[country is us] and
[type = stock] and
[Daily SMA(10,Daily Close) > 2] AND [Daily SMA(10,Daily close)<=11] and
[Daily SMA(20,Daily Volume) > 150000]
and [3 days ago daily SMA(50) x 3 days ago daily EMA (20)] ,
It works fine, BUT I only get 2 or 3 hits, which makes me wonder if my scan is correct. Any suggestions?
thanks
I have tried several scans, most of them based on Stockcharts pre-defined scans, such as Bearish 50/200 MA cross, moved below lower Bollinger Band, 52 week low, etc. I also looked at several SCTR scans, and other bearish scans in Sample Scans, Gord's Greer Scan building blocks, etc. The biggest problem I found was that the results produced were too late, meaning the downward trend had already started days, if not weeks ago.
I decided to try a simple 50 SMA crossing over a 20 EMA, which produced the best results so far. Here is the scan:
[country is us] and
[type = stock] and
[Daily SMA(10,Daily Close) > 2] AND [Daily SMA(10,Daily close)<=11] and
[Daily SMA(20,Daily Volume) > 150000]
and [3 days ago daily SMA(50) x 3 days ago daily EMA (20)] ,
It works fine, BUT I only get 2 or 3 hits, which makes me wonder if my scan is correct. Any suggestions?
thanks
0
Comments
If you want more hits, you could loosen up the volume and price restrictions - lower volume and higher price.
Or, adjust the scan date to random dates in the past and see if it does better. I would think you could get some energy sector hits after say June or July 2014. That would tell you the scan is OK but the market conditions aren't right for it yet.
MAs are always going to give you late entries. If you catch a good trend leg, that's OK. Another way might be to test for high value stochastics, say K(21,1) x 80, when the intermediate term MA is turning down or heading down. Then you would look at the chart itself to see if buyers are getting weak (either low volume and smaller range, or several up days followed by a mini climax volume bar - it might look like a breakout but in a down trend it's really exhaustion, or sellers are getting strong by breaking the lows of higher volume up bars). That approach might get you in a little sooner, with less risk if the trade doesn't play out.