Wednesday, September 30, 2009

A Few Notes on Intraday Stock Screening

I've been watching my basket of 40 stocks and how many have been making fresh five-minute new highs and lows. Here are a few observations:

* When we get a several minute market bounce or drop and far fewer than half of stocks register fresh five-minute new highs or lows, it's worth looking for a retracement of that move;

* A cumulative line of the number of stocks making new highs vs. lows gives a general sense of trending;

* If you stop seeing new highs or lows from stocks in a sector that has been leading the market higher or lower, that often precedes a market turn;

* When the market is making a valid breakout move, the vast majority of stocks will register new highs or lows;

* In a slow, range trade, you'll see a mixture of stocks making new highs and lows;

* If you define an X-minute opening range, seeing a great majority of stocks break higher or lower than that range is a useful alert to an early trending move;

* If you track new highs/lows and breakout moves at different time frames (for example, five minutes vs. one hour), you can catch short-term moves within larger-term moves.

I'm finding the Trade-Ideas platform to be useful as a way of creating custom baskets of stocks and tracking their strength and weakness over time.