Stan Weinstein's 30 week scan

farjohn

Hi,

I am new to Stockcharts and enjoying and learning from the site.

Can someone help me to develop a scan to identify stocks meeting Stan Weinstein's break-out/break-down criteria, as written in his book Secrets of Profit in Bull and Bear Markets:

In simple terms scan should identify stocks that are in range (Stage 1) for sometime, 30 week MA is flat, and then price breaks out of range with high volume.

Please see attached picture.

Looking forward to your help.

Regards,

John F.

markd

I think the way to approach this is with two scans, one to qualify the stocks as potential breakout candidates, and the second to find the breakout within a list of those candidates.

Price behavior is so variable that no scan can catch every situation that you would pick out by eye. You can see this if you look at the examples in Weinstein's book. Some rise before they break out, some dip. The problem when writing any scan is balancing general and specific conditions. If a scan is too broad, it picks up too many false positives, but if it is too narrow it misses too many good candidates.

I don't have an ready built scan for this, but here's an approach to start with.

Write a condition to find the 52 week upper price channel is greater than it was 52 weeks ago.

Then you want the 52 week upper price channel to be equal to it's value say 10 weeks ago.

These two conditions establish that the stock has risen but maybe in a pause.

Now look for a rising 13 week LOWER price channel - so maybe it's greater than 13 weeks ago. This means price lows are rising, approaching the upper channel.

Then look for the 13 week UPPER price channel BELOW the 52 week upper price channel. This tells you price has been paused for at least 3 months.

You might also want to test for price above the 52 week Middle Price Channel. That shows recent strength.

That's the first scan to make your list. You should review these stocks to become familiar with them, so when (really "if") the breakout comes, you don't have to look too long at it to see if the strength is real.

The second scan I would just test your list for high volume - maybe twice the 21 day average of volume - and an up close. Not all strong moves start at the breakout, and A LOT of breakouts fail. Also, the breakouts don't necessarily occur at the same channel length - so some might break the 13 week channel with volume, but not the 52 week, or vice versa - or, the channel lines might not capture the breakout at all. So look at every chart with high volume and eyeball them for the breakout.

P.S. This probably isn't the market to find these stocks, although there may be a few. You could try back dating the scan to maybe 2009-10, or 2012-14.

farjohn

Thanks Markd. I will start with your suggested approach.

lmkwin

Old thread, I know.

Chartmill.com has a filter in their scanner that allows to pick the Weinstein Stage, among other indicators.

https://www.chartmill.com/stock/stock-screener?f=we1,mc_sm