A Short Finding Screen Using Technical Analysis

First, let me give credit where credit is due. I put this screen together after reading an article by Blain Reinkensmeyer on StocksToGo.com called: 3 Shorting Strategies Using Technical Analysis

Of the 3 shorting strategies, I decided to build a custom screen for finding stocks that trade down to fresh new lows after a huge gap down day (number 3 in Blain’s article). In concept, this is a screen for a bearish flag, a well known and profitable stock chart pattern.

StockFetcher 2.0 Stock Screener Setup

To run this screen, open http://www.stockfetcher.com/, and click on SF 2.0

Show stocks where close is above 5
and average volume(30) is above 250000 do not draw average volume(30)
and open 2 days ago minus close 3 days ago is below -3%
and close 2 days ago is below open 2 days ago
and draw ppo(8,24)
and draw aroon up(20)
and draw aroon down(20)
and draw williams %r(20)

There are a two items you can adjust. First, you can adjust the number of days in the past where the gap occurred. Second, you can adjust the size of the gap by adjusting the “below -3%.”

Technical Short Screen Results as of Today
BG
PETD

I wanted to show you a chart I found of BG as a result of running this screen:

If price crosses below the 50 day MA, and the Aroon gets a bearish cross, that will be an excellent short entry point. There is already some nice divergence on the PPO, as well as it nearing the 0 level. If the PPO crosses 0, and the Arron has a bearish cross, as well as price dropping below the 50 day MA, this will be one juicy short trade…

Marketclub Smart Scan Score

A Short Finding Screen Using Technical Analysis