Active Screening: Apple Leads

It has been a couple of months since the results of this screen were last looked at, but a fresh run of the screen has seen very little change in the top ranked stocks (as ranked by Market Cap).

The stock screen used the following parameters:

• % Chg EPS; Q to last yr Q of 25% or more
• % Chg EPS; YTD to last YTD of 25% or more
• % Chg Revenue; YTD to last YTD of 25% or more
• Return on Average Equity of 17% or more
• 5-yr Revenue Growth Rate of 15% or more
• Market Cap of at least $50M
• Net Profit Margin of 18% or More
• Current price above $12
• Average 10-day volume above 250,000 shares

Apple's stellar quarter is likely to keep the stock in the no.1 spot for many more months to follow. It has been almost a year since this screen was first run and Apple still holds top spot. The stock was toying with its 200-day MA back in November, a situation which had previously offered great buying opportunities and it proved to be no exception once again.  The stock did briefly toil at its 50-day MA, but the stock didn't look back once it was able to put some distance from it. New buyers need to be looking to $420 support an area to hold on any retracement. This price should factor into any risk:reward calculation; the reward been a projected measured move target of $480. A Zignals Alert will help you track these two key price levels.



While Rio Tinto held second spot it had the dubious distinction of trading in a downtrend and was on course to test $40 support.  Since November it has been able to break upwards from the channel without making it back to $40; it currently lies just a couple of dollars shy of its 200-day MA at $60.  The next few weeks could see supply at the 200-day MA become more of an issue, although any retracement off its 200-day MA should find support at $58 (i.e. at its current price).  Given that, $58 is probably a good value price assuming the above plays out; stops go on a loss of the 50-day MA.



Another mining stocks occupies third spot. Barrick Gold (ABX) has been range bound since the latter part of 2010. This situation hasn't changed since last November, although the Accumulation Swing Index is favouring a bearish break of $43. Not helping is how converged 50-day and 200-day MAs are playing out as resistance. Value buyers may look to this as an aggressive entry opportunity, although stops would not be far below $43.



Fourth is still Baidu (BIDU). Back in November it had failed to hold an upside break of its 200-day MA, instead tumbling below both 200-day MA and its 50-day MA to leave it on a course to test $102.50.  It was able to gain some upward momentum from the broader market 'Santa rally', but it still had problems holding its 50-day MA. However, resistance connecting the swing highs from August looks to be more pressing. A break above this line should be enough to see a push above the 200-day MA too. Stops can go on a loss of the December swing low at $110.  The first target is $145.



Las Vegas Sands (LVS) has enjoyed a steady rally from the December swing low, but it has yet to test $50 resistance. A negative view on its Macau operations might crimp any drive past psychological $50, but there is little suggest in the chart that the market is dumping the stock.



Priceline (PCLN) was starting to show an ugly side back in November as it failed to break from a gently falling consolidation, and was soon followed by a 'Death Cross' between its 50-day and 200-day MAs. The stock eventually made it back to $450 where it was able to attract enough demand to see it hold this support level. Since then, the stock rallied to $525 where it has spent the past week shaping a small 'bull flag'.  The typical response from this pattern is a continuation of the upward trend with a measured target around $600; stops go on a loss of $510. Long term trend watches will consider Priceline range bound between $450 and $550 and may not be inclined to get involved until $550 breaks. If, on such a break of $550 volume expands, a revised upward target of $650 can be used.



HDFC Banks (HDB) was the only financial services stock to make the top 8 picks. In November the stock was struggling after it lost $28 support and was encountering resistance at its 50-day MA, but since then the stock has managed to clear a number of resistance points and trades at $31. The fact the stock has not only recovered from the significant loss of $28, but a declining channel connecting swing highs from last July, means shorts will be under pressure to cover (if they haven't already).  This demand will encourage additional funds in from the sidelines in the form of fresh buyers. TheStreet had downgraded the stock in mid-January to little effect on price action.



A third mining stock, Anglogold Ashanti (AU), occupies seventh spot. This stock has struggled to re-establish the 2010 bull trend, drifting from $52s highs to the current mid-$40s. Support can be found at $39 and the start of the 2010 trend at $35, but with both 50-day MA and 200-day MAs heading lower it's hard to see when this will break out of its funk. Bulls can look to sharply improving fundamentals, besting FY2010 performance, as an eventual trigger for a new upward trend.



The only new stock to make the grade was Continental Resources (CLR). This American oil and gas exploration company is not only enjoying solid earnings growth, but is one of the few qualifying stocks also enjoying a solid bullish trend. The stock is trading above (and successfully tested) $72 support. The break of $72 sets up a possible measured move target of $96 (risk is assessed using a stop below $72). The current rally was started from $46 in October and generated a 'Golden Cross' between the 50-day and 200-day MAs in December as it was trading around $62.


Remember, you can use Zignals Alerts to track when prices are triggered for any of the aforementioned stocks, or stocks you own or are interersted in.

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Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies via his Zignals home page. Each Zignals member has an unique home page which they can share with friends and clients to sell their strategies.

Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell it in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.

JOIN US TODAY - IT'S FREE!
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Active Stock Screen: November 30th

Since the last update in November the S&P was trading at 1,262 and stocks were still enjoying the fruits of the October rally. Since then, markets have eased, although some of these losses have been recovered over the past three days.

Our group of 8 stocks, ranked by Market Cap, were led by Apple (AAPL), followed by Rio Tinto (RIO), Cnooc (CEO), Barrick Gold (ABX), Baidu (BIDU), Priceline (PCLN), HDFC bank (HDB), and Yanzhou Coal (YZC).

The stock screen used the following parameters:

• % Chg EPS; Q to last yr Q of 25% or more
• % Chg EPS; YTD to last YTD of 25% or more
• % Chg Revenue; YTD to last YTD of 25% or more
• Return on Average Equity of 17% or more
• 5-yr Revenue Growth Rate of 15% or more
• Market Cap of at least $50M
• Net Profit Margin of 18% or More
• Current price above $12
• Average 10-day volume above 250,000 shares

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Creating a Zignals Chart Profile

Here is a request from a Member on saving chart settings and applying them to multiple stocks.

All I want to do is design a chart setup with certain indicators and a particular time frame and use that one setup for all of the symbols in my watchlist. I want to click on each symbol in my watchlist and have that symbol appear within the chart setup that I have created and saved.

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What next for the S&P?

At the end of August I signed off with the following:

The S&P may yet take another turn lower, particularly when we enter the seasonally weak September/October period. But should it turn into (or get close to doing) a "15%+" decline event from its 200-day MA then it may yet prove to be one of the greatest buying opportunities for the next decade or more.

October did play to seasonal form and the S&P ultimately dropped 14% from its 200-day MA, but will the 1,099 close of October 3rd stand the test of time?

As for the economic climate.  The PIIGS are still rolling around unsupervised in the muck.  New governments are taking shape in Italy and Greece. France and Germany agree to disagree. While the rest of the world look on wondering who will be next (which may require looking in a mirror).  

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Create a Managed Trading Strategy (aka Public Strategy) in Portfolio

In addition to creating trading strategies with StrategyStudio, you can take a more hands-on approach by creating a managed portfolio using the Public Strategy feature of Portfolio. Whereas StrategyStudio strategy signal generation is fully automated, Public Strategies offer the manager full control of all signals generated and delivered to your subscribers.

The first step is to select Public Strategy in Portfolio.

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Active Stock Screen: November 2nd

The previous running of this scan on October 19th was closely associated with the last swing high in the markets. The past couple of days have seen the bulk of these gains erased, but not to the extent markets are gasping for support. How have these losses impacted on our top-8 stocks as ranked by Market Cap?

The active stock screen used the following criteria:

Apple (AAPL) continues to hold top-dog spot and is trading well inside its rising channel. The 50-day moving average is playing as support. Even modest breaks of this moving average have failed to dampen buying enthusiasm. For now, this pattern remains unchanged until proved otherwise.




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Active Stock Screen: October 19th

The past month has seen a down-and-up which has taken markets back to where they started. At the end of the September the usual suspects topped the leading eight stocks ranked by Market Cap. What changed this month? Our active stock screen used the following criteria:

The number of qualifying stock dropped to 34. However, there was little change at the top.

Top dog is everyone's favourite, Apple (AAPL). Yesterday's earnings will put a dampner on today's trading, but the stock is likely to continue inside a newly formed rising channel and above $350 is additional support (not to mention the 200-day MA). Given the tumultuous past few weeks for Apple it's going to be interesting how the stock reacts going forward. A lengthy sideways consolidation - holding above $350 - would probably offer the best tonic. But for now, the stock is honoring a rising channel and trades are best held until this breaks.

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Portfolio Manager Metrics

I really like the portfolio manager but am unclear how the metrics are computed/what they really mean. Is this documented anywhere?

                                                                                         Gary

This post will give a breakdown of the different metrics used in Portfolio.

Starting Capital: Can't be changed once set. Important to have the correct starting capital if importing a portfolio.

Open Position@Cost: The cost to acquire all open positions

Open Position@Market: The current value of positions based on the most recent market close OR real-time prices (if real-time prices are selected).

Cash Balance: Remaining cash after open positions

Cash Change: Only applies to strategies where cash has been added, or in an automated strategy where cash has been added in order to meet capital requirements to hold all positions.

Open Position Change Today: Change in value of Open Positions relative to yesterday's Open Position value.

Total Value: Total Value of Portfolio based on end-of-day prices only (does not update when real-time prices are selected).


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Engineering a Trading Strategy

Strategies can be designed and built using Trade Timer or the backtest feature of the Strategy Builder. For an individual indicator, Trade Timer is the way to go, but if you are looking to compare a number of indicators together then Charts can be used to identify favoured signal triggers.

[1] Select a stock on a two year chart with the indicators of choice. In this example we will use three moving averages (10-day EMA, 20-day EMA and 50-day EMA) with the Money Flow Index. The stock you choose should be representative of the stock(s) you wish to trade with respect to Beta.

[2] Highlight the ideal buypoints. This is to focus the eye on the conditions of the technicals at this time (also price relative to the moving averages).


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Netflix: From Top to Bottom

While scouring the news for links I came across a chart posted by Blain over at TraderMike showing the extent of Netflix's plunge. His chart neatly shows how quickly yesterday's hero can turn into today's villain. It's also a good example for not letting a winner turn into a loser.

The Zignals Active Screen scan can help protect such losses.  As part of the screen, a daily email lists stocks qualifying under the filters of the Active Screen, but also the stocks which fail to qualify. In our analysis. Netflix (NFLX) featured in the active screen listings from December 2010 through to August 11th 2011, but eventually was dropped by August 23rd.

But even before NFLX's fundamentals led it to be dropped from the Active Screen, it's chart had already pointed to a significant shift in trend. The chart below dates from August 11th.



It was clear back then that the trend which had sustained itself from March 2009 was cooked. Especially when the break dropped the stock back to its 200-day MA, a test last achieved in the early part of 2010.  This in itself isn't bearish, but what followed in the days ahead was:

Things started brightly with the bounce off the 200-day MA at [1]. Given the period of time which had lapsed between tests of this MA the expectation would have been for a strong rally. Unfortunately, the honeymoon was brief and NFLX quickly gapped below its 200-day MA to [2]. At this point the decline from $300 was becoming something more than a pullback. Bulls attempted another defense and a rally emerged from $205 to regain the 200-day MA. But by now $240 was strong resistance as what was once demand (back in June 2011) turned into supply. The stock gapped below its 200-day MA for a second time and failed to attract fresh buying because of its inability to stay above this critical long term trend measure. When the company announced lower forecasts its goose was already cooked technically and the resulting gap down to the $170s was just icing on the cake.



The pain didn't end for bulls on the gap. It slipped further to $130 as it looks to be catching its breath. Although don't be surprised to see it take another leg down towards $100.

Certainly NFLX trading at $300 feels like a long time ago, not something which was true just a couple of months ago.

Always make full use of the tools available to you. A combination of Active Screening, Real-Time SMS Alerts and Charts can keep you up to date with your investments without having to watch the market 24/7.

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Follow us on twitter here


Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies via his Zignals home page. Each Zignals member has an unique home page which they can share with friends and clients to sell their strategies.

Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell it in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.

JOIN US TODAY - IT'S FREE!
Read more!