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How to use the Trend-Range screen

 

The six charts described in the previous section are the end of the process that begins with alerts in the Trend-Range screen (example below).  Once you understand the potential importance of finding stocks that match the patterns from the 6 charts, you can then turn to understanding where to find such charts by using the Trend-Range screen.

 

The Trend-Range report below uses S&P1500 to identify stocks that could be at high conviction inflection points.  We have highlighted in green the areas to look for potential BUYs and highlighted in red the areas to look for potential SELLs.  We emphasize that you must look at the charts themselves to identify true opportunities from false signals.

 

Possible important inflection points:

  1. Downtrend, Turn up [potential long] – the trend is down, but recently the stock has moved above the short term moving average.  A large potential move up means that, the medium term moving average (50DMA) or resistance is far above last price and it is more probable that the downtrend is over.

 

  1. Downtrend, Turn up {potential sell or short] – the trend is down, but recently the stock has moved above the short term moving average.  A small potential move up means that, the medium term moving average (50DMA) or resistance is close to the last price and it is more probable that the downtrend is not over.

 

  1. Uptrend, Turn down [potential long] – the trend is up, but recently the stock has moved below the short term moving average.  A small potential move down means that, the medium term moving average (50DMA) or support is close to last price and it is more probable that the uptrend is not over.

 

  1. Uptrend, Turn down [potential sell or short] – the trend is up, but recently the stock has moved below the short term moving average.  A large potential move down means that, the medium term moving average (50DMA) or support is far below last price and it is more probable that the uptrend is over.

 

  1. Range Top [potential sell or short] – last price is within 10% of the top of the 2 standard deviation Bollinger Band (96% of occurrences).  Range stocks have low trend strength, which means the likelihood is that the recent move higher will not be able to continue.  The up move should end soon and the next move should be down; toward the lower extreme of the range.

 

  1. Range Bottom [potential long] – last price is within 10% of the bottom of the 2 standard deviation Bollinger Band (96% of occurrences).  Range stocks have low trend strength, which means the likelihood is that the recent move lower will not be able to continue.  The down move should end soon and the next move should be up; toward the upper extreme of the range.

 

Below is an example of the Trend-Range alerts for the entire S&P1500 for the close 9/19/19. 

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