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Scanning for the Elder Value Zone

I wish to scan for stocks sitting in the Elder Value Zone, which Dr. Elder defines as when price sits between the 13 and 16 period EMAs or just below (but not above). I've tried some basic approaches - [open > ema(13)] and [open < ema(26)] - and also played around with Keltner Channels. However, I'm wondering if there is a better method. The idea is to discover the stock prior to the EMA 13 crossing the EMA 26.

Thanks for your help.


  • markdmarkd mod
    edited February 2016
    Maybe you want to look at your charts so you can more clearly define the set ups that work out.

    What is the direction of the ema(26) and how long has it been moving in that direction?

    To get this, you would test its current value to its value say 1 or 5 or 10 days prior.

    What is the direction of the ema(13)?

    Same test, but probably fewer days back.

    Then you would test for where the ema 13 is versus the 26, above or below.

    Also, you might want to test for the ema 13 turning, in which case you would test against two prior days, so maybe the ema today is greater than one or two days ago, but less than three or five days ago - that would mean it is turning up. Vice versa for down.

    Where is price in relation to one or both of these emas?

    To get this, probably test the close above or below one or both of the emas. But, you might want to test whether the bar is completely above or below an ema, in which case you would test for the high or low greater or less than an ema.

    Another way to test for price location is to use a very short term ema - maybe 3 or 5 - and test whether it is above or below the ema 13, and whether it is turning up or down.

    Just some ideas.

    P.S. you might also want to check out the longer term MAs and price - I'm guessing long trades won't work out so well most of the time if the 200 ma direction is down and price is below it, where a lot of stocks are now. You want the 200 rising and price above it, and ideally the 50 ma rising also, or at least above the rising 200, and more tall up volume bars than tall down volume bars. Also check that the up volume bars are long white candles, showing buyers are strong. Short up candles on high volume, or up candles with long wicks and/or tails (so, short bodies) show sellers are getting stronger. You can get good jumps in a down trend if there is evidence the sellers are exhausted and buyers have appeared, but generally, it's probably better to wait until at least the 50 has turned up and has been tested. By that time, the 200 ma should be losing its downward momentum also.
  • Thanks, Mark, for your comprehensive reply and great suggestions, which I will be giving a try. Much appreciated.
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