Scanning With StockCharts.com Part 2: Combining Multiple Indicators to Find Reversal Plays

     When we trade we want to generally look for stocks that are reaching their oversold levels. StockCharts.com has an incredibly advanced scanning system that allows us to input specific requirements for stocks. Though we could go in-depth breaking down the many options through stockcharts scanning, stockcharts has themselves provided us with countless articles and tutorials on how to scan using their system. What we will focus on is how to input specific scans designed to find stocks that are near key reversal points. In this video we will focus on three such scans, all of which look for oversold stocks. These scans will be available for you to copy/paste into their scanning system so you can view the results each night when you do your scanning! Let’s get started!

RSI/MFI/SLOW STO Combination Scans

Scan 1: Looks for stocks where the RSI/MFI/SLOW STO are in their oversold levels adjusted to our specific settings. This can find many stocks that are ready to see reversals topside. However the one downfall is, though they may be in their oversold levels, a reversal may have already begun and the optimal entry missed. For this scan to work, only 1 of the 3 need to be in oversold levels.

Scan Criteria:

[TYPE = STOCK] AND [COUNTRY = US] AND [DAILY SMA(20,DAILY VOLUME) > 300000] AND [DAILY SMA(60,DAILY CLOSE) > 1] and [[RSI(12) < 30.0] or [MFI(12) < 20] or [Slow Stoch %K(12,2) < 20.0]]

Scan 2: Looks for stocks that are not yet in their oversold levels, but are beginning to cross into their oversold levels. The advantage of this scan is it finds stocks which still have some downward momentum but are near key reversal areas, so we can begin watching them before a reversal occurs. It allows us to be in place a few days in advance of a reversal.

Scan Criteria:

[TYPE = STOCK] AND [COUNTRY = US] AND [DAILY SMA(20,DAILY VOLUME) > 300000] AND [DAILY SMA(60,DAILY CLOSE) > 1]

and [[30 x RSI(12)] or [20 x MFI(12)] or [20 x Slow Stoch %K(12,2)]]

Scan 3: Looks for stocks where the RSI/MFI/SLOW STO are all in their oversold levels. This scan will generally produce fewer results; however it can narrow in more tightly on potential reversal plays. Similar to scan 1, often many of the charts which appear will already be reversing topside.

Scan Criteria:

[TYPE = STOCK] AND [COUNTRY = US] AND [DAILY SMA(20,DAILY VOLUME) > 300000] AND [DAILY SMA(60,DAILY CLOSE) > 1]

and [RSI(12) <30] and [MFI(12) <20] and [Slow Stoch %K(12,2) <20]

Additional Articles On Scanning, particularly the And/Or issue:

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