Zignals blog

Active Screening: Apple Leads

2012-01-25T08:14:00.000-08:00

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!

Active Stock Screen: November 30th

2011-12-01T06:51:00.000-08:00

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

Apple (AAPL) has occupied top spot since the start in February (and likely long before). Long term trend followers were presented with a buying opportunity following a bounce off its 200-day MA on November 25th, when it dropped to $363. As part of the bounce, the stock ducked out of its rising channel, established in July 2011. This has left Apple in a bit of a "no-mans" land between the 200-day MA and former channel support - turned resistance. It will soon have to contend with a now-falling 50-day MA; an area of potential supply on the next advance. The 50-day MA currently lies at $392.

Next in line is Rio Tinto (RIO). The stock is trading within a declining channel established in April 2011. The price decline is on course to test support at $40. However, yesterday's surge in the markets was enough to see RIO rally to channel resistance. While the likelihood of another strong day like yesterday's is low, there is an opportunity for buyers to break RIO out of its rut; a push above $54 would achieve this. If this was achieved, then RIO would be on course to test its next level of supply starting at $61.85. The 200-day MA, currently at $62.54 and falling, may itself bring some sellers. The more likely flip side is for prices to resume their downward trend, starting with today.

In third spot is Barrick Gold (ABX). The chart I have been using for this stock has been unchanged in months. Today is no different. The stock remains range bound by $42/43 support and $54/55 resistance. Stocks which behave in such fashion can be bought on drops to around $45 and sold on moves to $53. Alternatively, small positions can be built over a number of months in anticipation of an upward move (more likely if gold prices continue their advance).

Fourth is Baidu (BIDU). In early November the stock had managed to escape the boundaries of its July decline, regaining support of both its 50-day MA and 200-day MA in the process. Unfortunately, the momentum couldn't be maintained. BIDU threw away $135 support, dropping below both 50-day and 200-day MAs in the process. The 50-day MA also crossed below the 200-day MA ("Death Cross"), marking the start of a new long-term downtrend. Looks on course to test $102.50 support; a break above $145 will offer bullish momentum traders an opportunity to rejoin the party.

New entrant, Las Vegas Sands (LVS), has been range bound for the best part of a year, much like Barrick Gold (ABX). While trading inside this range it won't be attracting much attention, but it does prepare the stock for its next move forward. From March 2009 to November 2011 the stock rallied from $1 to above $50. Since the peak in November, buyers have defended $36 while sellers used psychological (whole number) resistance at $50 to take profits. Once the profit takers are done the stock will be ready to resume its advance. A sleeper pick.

In early November, Priceline (PCLN) was making a run at resistance dating back to May 2011. In the process, it had rallied above both 50-day and 200-day MAs, but was lacking the volume required to break supply. Supply eventually cracked November 8th as $525 broke with volume. But just over a week later, PCLN dropped below $525 and sellers continued to push prices lower, leaving behind a 'Bull Trap'. PCLN also saw a 'Death Cross' between 50-day and 200-day MAs. The stock is currently on course to test $425 support.

In seventh spot is HDFC Bank (HDB). The stock has traded within a consolidation bound by $27 support and $36.50 resistance. On November 21 the stock gapped below $27, turning the entire February and October consolidation into new supply. The snap rally on November 25th returned the stock to $27 and into this - now - supply zone. Further price gains will become more difficult. In addition, the stock will have to contend with supply geneated by the falling 50-day MA currently at $29.77.

The last stock to make the grade was Anglogold Ashanti (AU). The stock is trading against broad channel resistance, but this is really a scrappy consolidation. An attempt at establishing a bullish trend on a break of $47 in July failed; in doing so the stock fell back to $39 support before rebounding. For the trend to resume it will now need to clear $53 and stay there. Until then, price action will remain mixed with no clear advantage for buyers or sellers.

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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!

Creating a Zignals Chart Profile

2011-11-30T03:32:00.001-08:00

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.

To start, pull up a chart and add the follow indicators

Moving Average (Simple) with Periods = 50 (click [+Add] to add the moving average to the chart)
Moving Average (Simple) with Periods = 200 and change the colour (click [+Add] to add the moving average to the chart)
Relative Strength Index left at default values; click [+Add] to add

From the Chart header menu, select "Period"; from this menu choose "3 Years" - a tick will appear next to the selected period. You don't have to change it from Daily prices.

Along the bottom of the chart is a slider covering the 3 Year Period. Note: This step loads the past 3 years of data, but to display the 3 years you will need to drag the timeframe slider back. Manually adjusting in this fashion retains the display period when switching between stocks, but it's also influenced by the Profile bug above.

Again, from the header menu, select "Profiles" and "New": You should see this.

Give your Profile a Name - then [Save]

Go back to "Profiles" in the menu bar and choose "Apply"; you should see the 'Default Profile' and the 'New Profile Name' you have just created. While viewing a chart, switch between the newly created Profile and the default one.

Rinse and Repeat with your chosen indicators to create personalised Profiles.

Creating a Multiview Chart List

Stocklists can be created in Alerts or Screener. An example in how to use the Screener to build a stocklist can be found here. To create a stocklist in Alerts, do the following:

In Alerts, select [New] Alert from the menu

In the New Alert window, select the radio button next to "Select Stocklist"

Click [Manage Stocklists]

In the Manage Stocklists menu, select [New]

Give your stocklist a name, then [Save]

Once your stocklist is created you can start adding stocks at this point from the search bar.

Head back to Charts after your stocklist is created.

Stocks can be added to the list directly from Charts (in the 'Chart' menu of Charts); when in the Chart menu, click [+ Add to Stocklist] and select a stocklist to add the viewed stock too. Note: Stocks can't be added to read-only Zignals stock lists.

Next select 'Multiview' from the Chart menu. A menu will slide in from the left with a default Zignals list loaded. Select your newly created stocklist from the Stocklist dropdown menu.

Underneath the Stocklist dropdown is a [View Entire List] button; select this to load your charts, displayed 4 at a time with a scroll bar to the right to display more charts.

Selecting an individual chart in Mutliview will bring the screen back to single view; select Mutliview from the Chart menu to reload the multiview format.

With you charts in multiview, select the newly created profile from the Profiles menu to apply the look to your charts.

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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!

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.

What next for the S&P?

2011-11-14T07:35:00.001-08:00

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).

The "not so extreme" count for the S&P continued to check boxes for September and October 2011 (for a loss greater than 10% from its 200-day MA), but will November break the three month bearish run?

As of the close of November 11th, the S&P was down 0.7% from its 200-day MA, 5.3% above its 50-day MA and 1.6% above its 20-day MA.

There were 9 comparable matches dating back to the start of 1950; the performance over the following 12 months is given for each date:

The most recent match was 2003 which also proved to be one of the most bullish; the S&P finished up 30% by the same date in 2004. However, there isn't any edge going forward as the plot of the average and 95% confidence intervals shows:

The only statistic of note was the high probability of a lower close the next day; which should mean a loss for the S&P today.

Beyond today there is little to derive; seasonal factors should favour a 'Santa Rally', but by next Spring the S&P may be relatively unchanged. Bulls may have to wait until the latter part of 2012 before they get the boost they crave.

However, there is one interesting snippet from the data. Taking the 12-month lower 95% confidence value projection and applying it to November 11th's close, would leave the S&P trading at 1,099 - the swing low of October 2011. Perhaps the action to watch in 2012 is for a (successful) test of the October 2011 low? This might be the confirmation which attracts money from the sidelines into stocks (from the context of a worst case scenario)

In summary, despite the projection uncertainty, there appears to be more on offer for bulls than bears. Although context should be drawn from a January 2011 projection which currently requires the S&P to rally by over 6% in the space of a couple of months, just to meet the low-end of the 95% confidence interval range!

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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!

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

2011-11-08T09:14:00.000-08:00

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.

The [Create] button will remain dimmed (non-selectable) until after you give your Public Strategy a name. Define the base currency and the Starting Capital. You can include a description and set your subscription charge, up to $100 a month. It will be possible to update your description at a later stage, although the subscription charge is set for the lifetime of the strategy. For now, accept the default 'No' for External Signals (this is for Excel and Metatrader based strategies) .

After your strategy has been created, select it from the dropdown menu. All Public Strategies have blue text colour (StrategyStudio are in green and Private Portfolios are white text).

Your Public Strategy is then ready for signals. The menu bar has options to create a Private Portfolio, create another Public Strategy, enter a trade signal for your current Public Strategy, study graphical performance and returns for your Public Strategy, copy your positions - transactions - signals to an Excel spreadsheet, print your transactions, or access Help.

Next, Create a Signal.

There are three types of Trade Signals:

[1] A Signal set during market trading hours
[2] A Signal set outside of market trading hours
[3] A Conditional Signal which can be set an any time and only triggers when the price conditions of the order are met.

The simplest kind of Signal is one created during market hours.

Choose the stock you wish to trade. This will load the current price with a refresh process. When the signal is sent the trade will be recorded at this price. Fill in the Target and Stop price; all order require a Target & Stop, although these can be updated at any time over the lifetime of the trade. Also define the number of shares; ensure there is sufficient capital to meet the number of shares traded. When you are happy with the conditions of the order hit [Create Signal]

A confirmation dialog will ask if you wish to proceed with the Signal. Once confirmed the Signal will be delivered to all of your subscribers.

A final message will confirm a Signal was Created.

The new transaction will appear in your Positions

In the Transactions History

And in the Signals record log.

Your subscribers will have access to the same information in their Portfolio view (based from the time their subscription started; for example, in the above Portfolio, a subscriber joining after 9th February 2011 would not see a record of the earlier Signals).

The trade dialog allows for the use of either a fixed or relative stop for signal orders entered outside market hours. Outside market hour trades will fill at the next open price. The open/fill price will be used to set the relative stop; for example, a purchase of a stock with an open price of $100 and a relative Target of 25% and a Stop of 10% will exit if the stock price reaches $90 (at stop) or $125 (at Target). Again, this Stop and Target Price can be adjusted after the trade is opened.

The final Signal type, the conditional order, allows you set the trigger Entry price - and if filled, the Target and Stop price to use.

Over the course of the trade, Stop and Target prices can be updated. Existing positions will be displayed in a drop-down menu.

The same selection process is used to Exit a trade prior to a Target or Stop been hit. It's possible to exit a partial position in this manner - the remainder of the position can be allowed exit when the Target of Stop is hit, or can be manually exited at a later date.

As the Portfolio builds up with trades you can use the Statistics and Performance metrics to study return.

Potential subscribers will also have access to your Performance data to help them decide whether to follow or purchase your strategy.

You can promote your Public Strategy from your Home Page. Your Home Page is available by clicking on the icon next to your user name OR by clicking 'My Page' under the Community tab.

When loaded, your Home page will look something like this:

Strategies will be available on the right-hand-side with personal information, charts, watchlist and Twitter feed (if any) on the left. The center pane is taken up with Signals, Strategies, Charts and Comments.

Clicking on a Strategy from the right loads the information on the center pane. In the URL bar will be the exact address to lead people to this strategy. It will look something like this:

http://www.zignals.com/main/users/homepage.aspx?username=fallond#strategy193

'fallond' will be the username of the owner, '#strategy193' will be the reference number for the strategy.

This Home Page link can be shortened and shared on Facebook, Twitter, Blog or Forum. It could be used in an email signature too.

Each Strategy can also be directly linked, Tweeted or Facebook Liked from the Home Page as illustrated below:

The [Free Preview] button allows any potential Subscriber follow a weekly summary of delayed Signals for free. If they wish to upgrade to real-time Signals they can do so at any time. Upgrades to real-time Signals earn the Public Strategy owner a 50:50 share of the subscription revenue.

All free and paid-for subscriptions are managed from the Subscription & Previews tab of Account Management, located by clicking the user id link in the top-right.

Public Strategies are Free to create and only require a no-cost Registration with Zignals to get started.

Note: A Public Strategy can trade any instrument, including Forex, as available in our global data.
Trades of foreign stocks will have an end-of-day FX rate applied to the transaction to convert it to the Portfolio's base currency.

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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!

Active Stock Screen: November 2nd

2011-11-02T10:03:00.000-07:00

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.

The first of a group of commodity based stocks, Rio Tinto (RIO), has faced the opposite predicament to Apple. It has spent the bulk of time over the past couple of months below its 50-day MA.However, last week it was able to push above its 50-day MA, a feat last achieved in June/July. There is a resistance around $62.50 which will add supply should the stock be able to build an advance from its current price of $54.27. The 200-day MA at $64.29 and falling, will soon be contributing supply of its own.

In third spot is Cnooc Ltd (CEO). Since its last feature in October the stock was able to make a brief pop above channel resistance before falling back inside. The stock has recently seen its 50-day MA tick higher in line with an improving bullish trend. At $195 the stock is again placing heavy pressure on channel resistance, but if it can clear $202 it will create a head-and-shoulder reversal which will mean anyone who bought this stock from August through to today will be holding a profitable position. The next area to break will be its 200-day MA which currently sits at $217.18, but that is another day's problem.

In fourth spot Barrick Gold (ABX). Like last month it has done little to change its sideways path. At the moment it is pushing towards $55.50 resistance but there is little to get excited about here until either longstanding channel support around $43, or resistance at $55 is breached.

In fifth lies Baidu (BIDU). September saw the stock drop below channel support, while October saw the break confirmed as the rally stalled at former support turned resistance. However, a second challenge at resistance (plus nearby 50-day MA and a declining trendline) has suceeded and the early stages of a new rally are now in place. Critical to its success will be for $135 support to hold.

In sixth spot is Priceline (PCLN). While the stock has managed to regain both 50-day MA and 200-day MA support, it hasn't yet challenged larger resistance of the channel. Buying volume hasn't been particularly heavy which may yet hold it back for a break of $525.

In seventh spot is a new arrival HDFC bank. Like Barrick Gold (ABX) it's caught in a bit of a trading range, bound by $27.50 support and $36.50 resistance. It may yet turn into a sleeper hit, but for now this is more 'sleeper' than 'hit'.

In eighth spot is Yanzhou Coal (YZC). This stock is still recovering from the shock when it lost $37 support in August and fell all the way to $18 by the start of October. There appears to be a supply zone around $33 but with the stock trading around $25 it's a long way from challenging this level. Of greater interest is the proximity of the 50-day MA at $24.70 which it will need to work as support as it looks to build the foundations of a new base.

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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!

Active Stock Screen: October 19th

2011-10-19T06:15:00.000-07:00

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.

Second on the list is Vale S.A. (VALE). The 'Bear Flag' from September continues to influence as the attempted rally in early October stalled at converged resistance from the 'Bear Flag' low at $25, plus additional supply generated by the 50-day MA. The stock remains on course to reach the measured move target of $20.14. Bulls are unlikely to bite until it breaks above $25.

Rio Tinto (RIO) is in the same predictament as Vale S.A.. It too stumbled at resistance created by the August swing low, converged with its 50-day MA. The bullish threshold to break is $55.

In fourth spot is Cnooc (CEO). The stock is stuck in a downtrade created from the April 2011 high. Like other stocks listed here it's contained by resistance created by the August swing low and the 50-day MA. The line in the sand for bulls is $180.

In fifth place is Barrick Gold (ABX). The Accumulation Swing Index is suggesting the $42-$55 trading range, which has been in play throughout 2011, is likely to break to the downside. For now, it remains inside the range with resistance at the 200-day MA. Shorts might become more emboldened at this level, placing stops above the 200-day MA.

Next is Baidu (BIDU). Last month it cracked below the rising channel from 2011 with only $115 left to cling on to for support. Since the break, it ducked below $115 before recovering, only to encounter supply where once there was support. There is significant resistance around $130 with October buying volume out gunned by selling volume.

In seventh spot is Free McMoran (FCX). The stock bust through $47 support and has evolved into a new downward channel. Even if the channel was to break upside it wouldn't be long before it's against newly formed $47 resistance. On the bullish front, buying volume has surpassed selling volume for October - this favours an upside break.

The last spot on the list goes to Priceline (PCLN). Last month the stock narrowed towards a triangle apex, eventually losing trendline support, but finding support at $450. From this, a new downward channel has emerged. Within this channel there is resistance at the 200-day MA which is where PCLN finished yesterday. Shorts will look to play this with stops above yesterday's high at $506.

If you are interersted in creating your own active stock screen you can do so here. You can watch a video on creating an active stock screen here.

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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.

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Portfolio Manager Metrics

2011-10-13T09:27:00.000-07:00

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).

Net Profit: Return of closed trades after commission (excludes Open Positions)

Net Profit (%): Net Profit percentage return relative to Starting Capital (includes commission, excludes Open Positions)

Return on Capital (%): Net Profit relative to Starting Capital, excluding commission.

Exposure (%): Over the life of the portfolio what the percentage of equity exposure relative to total portfolio value.

Profit Factor: Absolute profit of (closed) winning trades divided by absolute losses of (closed) losing trades
Payoff Ratio: Ratio of average win to average loss.

Recovery Factor: This is the Net Profit of closed trades divided by Maximum Drawdown (%).

Sharpe Ratio: Caclulated for the past 12-months as follows:

Max DD (%): The Maximum Drawdown for the Portfolio is a measure of the maximum decline in cash:equity value (peak to trough). Close positions only.

Longest Flat Days: The longest sequence of days when there are no trades.

Number of Trades: The total number of closed trades

Win/Loss: The percentage of winning trades

Avg. Trade (%): The average percentage return per trade

Avg. Winner (%): The average percentage return of winning (closed) trades

Avg. Loser (%): The average percentage return of losing (closed) trades

Avg. Hold Days: The average number of days (closed) trades are held

Avg. Hold Winners: The average number of days (closed) winning trades are held.

Avg. Hold Losers: The average number of days (closed) losing trades are held

Max consec. win/loss. Best sequence of winning trades and worst sequence of losing trades.

Component

Cash:Equity

Drawdown

Annual Returns / Monthly Returns / Returns by Stock / Returns by Currency

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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.

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Engineering a Trading Strategy

2011-10-05T08:22:00.000-07:00

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).

[3] Summarise the conditions of the indicators at the point of the ideal 'Buy' signals.

[4] Run a preliminary backtest to view strategy performance. The above conditions are still quite general, so signals are unlikely to match, but it will give an indication as to what can be expected.

Use default risk management and stock list (18 U.S. stocks) on 2 years of data (matching the chart timeframe). Starting Capital is $100,000 with a maximum 10% of capital assigned to any one position.

[5] For the record, the S&P gained 10.1% over this period; so anything above this is beating the market, anything below is underperforming.

This strategy generated the following statistics

And the following signals in MSFT

The initial prognosis was good; one of our three ideal entry points were hit and remaining signals were close to swing lows. Note: This step is not about profitable trades, it's about timing for good entry signals. For example, the Feb 2010 signal caught the swing low, but under the default exit conditions it closed for a loss. Use the Strategy Statistics and Performance as a guide.

[6] Next it's time to optimise the entry signals. We could do this by adding another technical indicator. This time we add Relative Strengh Index (RSI) at a setting of 5-bar periods (over the default 14 period) and again record the values of this indicator at our optimum signals:

Our updated values for our strategy are now:

An improvement over the earlier ruleset. The MSFT triggers are now:

The strategy keeps the good February 2010 signal. The June 2010 signal is close enough to considered true, and while the February 2011 signal is well off the desired June 2011 signal, the strategy did catch the later August 2011 reaction low.

At this point we won't tinker too again with the signals - next we will look to adjust the exit

[7] The signal exit is governed by the risk management settings in the Setup menu.

Step 1: How far can the initial stop be tightened in order to maximise the good (swing low) signals? The idea is to minimise damage caused by poor signals like the one in February 2011 for MSFT, while preventing early stop exits in strong signals.

Tests of different Stop Percentage suggested an optimum value of 9%.

Step 2: How soon should the Trail Targets & Stops be used? The use of Trails is governed by the Target Percentage. When the Target Percentage price is hit the Trail Targets&Stops are activated. Tests of different Target Percentages between 5% and 15% generated little change in Strategy Net Profit, but there was a sharp drop when the Target Percentage was 4% or below.

Although the best profits were returned when the Target Percentage was 5%, it was too close to the drop zone to recommend its use, so the next best was 9%.

Step 3: With the Trail Targets & Stops kicking in after a 9% gain, next is configuring where to place the Trail Stop and how often the Trail Stop should be adjusted by use of the Trail Target.

Because most trades will exit at the Trail Stop it's important to give positions a chance to ride the recovery trend. The Profit Target governs the top side exit, but it can be raised so it's not a factor in the final signal exit (e.g. set at 999%). However, this is not the next step.
The interdependant relationship between Trail Stop and Trail Stop means pairing each combination is necessary to maximise Strategy Net Profit. This offered the following table for Net Profit

As a mountain chart, Net Profit looked like this

There are two interesting Profit clusters; one which uses a low Trail Target and a loose Trail Stop; the second which uses a moderate Trail Stop and a higher Trail Target. To differentiate which to go with, comparisons are made adjusting the Profit Target for the five lead combinations of Trail Target/Trail Stop.

Step 4: The final step is comparing the strongest combinations of Trail Target and Trail Stop to differing Profit Targets (Note: Net profit is slightly different to previous values due to differing backtest dates)

The optimum combination of the Trail Target, Trail Stop and Profit Target is 7%, 5% and 25% (Note: testing 24% and 26% as a Profit Target didn't improve returns).

[8] As part of the strategy a quick test can be done to compare performance during a bear market - in this case, from October 1st 2007 to March 31st 2009. During this time the S&P lost 48%, while the aforementioned strategy lost a more palatable, although not ideal, 33%.

[9] Publish your strategy. This will list the strategy on your home page and can be promoted on Facebook or Twitter. Trading signals will also be delivered for free in real-time to your email address.

If you are interested in getting the signals for this strategy you can subscribe to it here.

Netflix: From Top to Bottom

2011-09-28T07:27:00.000-07:00

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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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!

Active Screen: CANSLIM September 23rd

2011-09-23T09:10:00.000-07:00

With the shaken-and-stirred action of the past few few days fresh in the memory, how has it panned out for our top-8 Active Screen stocks over the past couple of weeks. Our active stock screen used the following criteria:

The results were little changed, which highlights one of the weaknesses in fundamental screens in its failure to accomodate for momentum - Energy/Commodity stocks are getting killed out there; five of the top-8 (by Market Cap) belong to this underperforming sector. In defense of this scan, the 'M' of CANSLIM would remove all of these stocks from consideration.

Luckily, top dog remains Apple (AAPL). The consolidation played out to form, the tightening action eventually breaking in the direction of the trend (as dictated by the 200-day MA), i.e. higher. Important for the stock going forward is it remains above the consolidation - which really means holding above $390. Secondary level of support between $353-363.

Second place Vale S.A. (VALE) followed through on its bear flag; breaking below consolidation support, but also losing the July reaction low of $24.32. Rough times ahead. If a measured move was to evolve from this then another 24% could be trimmed off the price from the breakdown; this sets a downward target of $20.14.

Third place was Rio Tinto (RIO). It suffered a similar fate to Vale S.A. in breaking the Bear Flag and moving lower. Little to recommend at the moment.

Oracle (ORCL) was dropped so in fourth place is promoted Barrick Gold (ABX). Not surprisingly, Barrick Gold (ABX) suffered the same fate as its peers, dropping over the past couple of days, but not enough to see a challenge on trading range support. The stock has had a quiet 2011, but this low key approach may benefit it given the general carnage in the sector.

Prior weakness in Baidu (BIDU) resulted in the break of channel support. A break which was accompanied with higher volume, a confirmation of the breakdown. It's currently on the way to testing $115 support.

Another commodity stock on the rocks holds sixth spot. Free McMoran Corp (FCX) had already lost support in early August, so this week's selling just piled on the pain. $33 support is now resistance. The best hope for bulls is a higher volume rally which closes above $33 over the next couple of days. If this was to happen then a 'bear trap' would emerge and a rally towards $42 favoured.

In seventh spot is Priceline (PCLN). The potential 'bear' trap has instead evolved into a wider, yet narrowing, consolidation. It's going to take a little longer for this consolidation to resolve. For now, it's above the 200-day MA with rising support just below.

In eighth spot is Yanzhou Coal (YZC). Unfortunately, the stock is in freefall since it lost $36 support at the start of August. It currently trades at $22 and doesn't look like it will be going higher anytime soon.

If you are interersted in creating your own CANSLIM stock screen you can do so here. You can read more, and watch a video, on creating an active stock screen here.

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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.

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Active Screen: CANSLIM August 13th

2011-09-13T06:28:00.000-07:00

With our updated screen criteria there were a couple of changes in qualifying stocks. Our active stock screen used the following criteria:

Of the stocks in this scan there was only one change from last month: CNOOC (CEO) was dropped and Rio Tinto (RIO) made a return. The remainder of the list was unchanged.

Streaking ahead is Apple (AAPL) with a Market Cap over twice that of second place Vale S.A. (VALE). Despite the 'stepping back' of Steve Jobs, AAPL has continued to defend the thick band of support running between $355 and $362. Current price action shows a tightening of the consolidation. Ideally, this should break higher in line with the direction of the trend leading into the pattern. The presence of $355-362 support (even the 200-day MA) should also help shore demand at rising wedge support. Despite all the positives, AAPL will find it hard to swim against the tide if the broader market takes another dive lower. Cautious optimism.

Next up is Vale S.A. (VALE). Last month saw a collapse from the relative safety of its 200-day MA to the depths of the July 2010 swing low. Unfortunately, it's struggling to form a firm base, the rising channel has more in common with a 'bear flag' than any bullish pattern. The last line of defense does appear to be the July 2010 low at $24.32. If you are thinking of VALE for the long haul you would be better to wait for it to break above its 200-day MA using a Zignals Stock Alert.

In third spot is Oracle (ORCL). Last month the decline quickly sliced through the July breakout gap support at $26. But since then it has managed to trade around this level without following through to the bigger band of support down at $21-23. The likelihood is that the scrappy consolidation around $26 will eventually give way to lower prices, but that it may not be the meltdown which led into the consolidation. However, the broader bull trend from March 2009 is over, so whatever emerges is unlikely to see the same level of return which took it from $14 to past $36 in just over 2 years.

Returning to the list is Rio Tinto (RIO) after a lengthy absence. Like VALE S.A. before it has struggled to recover, after slicing through its 200-day MA in the recent down swing. There was also a convergence of 20-day, 50-day and 200-day MAs which ultimately resulted in bearish crosses between these MAs. There is little to intice buyers at the moment. A strong move past $62.50 would confirm a bottom and keep the prior trend intact, but it's a big ask.

Another miner takes up the next spot, Barrick Gold (ABX). However, unlike its brethren it has managed to buck the trend and push higher, taking it very close to a break of resistance. The Accumulation Swing Index doesn't suggest a $55.50 will break (yet), but should $55.50 clear on heavy volume then it's game on. In the short term, watch for a push back to $51 before the next challenge on $55 is mounted.

Next on the list is Baidu (BIDU). At the end of last month it was trading alongside channel support, since then it has bumped along a little higher, but hasn't enjoyed the injection of buying volume which would firm demand going forward. However, with the 200-day MA lending additional support and a bullish trend which is still intact there is nothing to stop it pushing higher without the volume. Just be wary of selling accompanied by volume that exceeds recent buying.

Free McMoran (FCX) had already flashed its troubles back in August. Since then the stock has done little to change the picture. In fact, the stock made a second (failed) challenge on $47 before it darted lower; it currently trades in around $41. A move to the low $30s still looks the favoured outcome.

Finally, Priceline (PCLN) closes out the top-8. August saw a gap-break of a trend dating back to September 2010. It had looked like the stock was about to enter a consolidation phase with a phase of lower prices. However, the stock has since recovered from those losses - regaining $500 - and rallying back to resistance. The question now is whether the break of the trend is now a powerful 'bear trap' or a new sideways congestion range bound by $450-550 resistance. A break above $550 on volume would give the nod to the 'bear trap'.

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Why not create your own Active Stock Screen. Watch this video to find out more:

Take this a step further and build an Alert on to your Active Screen list

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Follow us on twitter here

Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

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 your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.

JOIN US TODAY - IT'S FREE!

S&P - Not So Extreme...

2011-09-09T04:24:00.000-07:00

A couple of weeks ago, extreme extensions of the S&P to its 200-day MA were examined dating back to 1950. The simple conclusion was such extremes were rare, even for a relatively modest 15% move away from the 200-day MA.

In this article, the 10-15% range from the 200-day MA was examined for the S&P. This period included the August 2011 swing low. The year and month when this event occurred was recorded in the table below.

The first point to make is the clustering of this condition by year. None of this is a surprise since it reflects bearish market conditions, primarily cyclical bearish market events. The current sequence is unusual given its protracted duration from 2007 to today (and maybe into 2012?). Ultimately, this may help the S&P build the next rally and offer a protracted bull market, much like the nineties offered (but probably not as good!).

The second point is the clustering across months. 1974 was a particularly bad year, for 9 of the 12 months the S&P traded 10-15% below its 200-day MA. Ultimately, it maxed out at 28.7% from its 200-day MA in October of that year.

This second point will likely have bulls scared for the rest of the year and into next. In 63% of cases, the S&P has two or more months within the year when the S&P was 10% or more away from its 200-day MA. Luckily, of those cases, 58% were for two or three months in the year. So while we may see another 10% break in September and October, it likely won't be enough to prevent a Santa rally.

In August, the S&P was trading in a pattern similar to December 1973. This is perhaps the most bearish outlook of the current scenarios on offer. Should this hold true, then the next 12 months are unlikely to deliver much joy. Although the October 1974 low ultimately marked the starting point for the next secular bull market up until 2000.

Again, a Zignals Stock Alert set to mark an SPY cross above its 200-day MA will protect against downside risk and let you know of a good time to start buying stocks.

-------

Why not start your Zignals Trading Strategy Business with us today?

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Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

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 your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.

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Getting Started with Zignals Free Stock Charts

2011-09-06T09:41:00.000-07:00

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Getting Started With Zignals Charts

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Why not start your Zignals Trading Strategy Business with us today?

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Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

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 your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.

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Low Extremes in the S&P

2011-08-31T08:58:00.000-07:00

As the market takes another step higher I took a quick look at S&P price low extremes relative to its 200-day MA. The data covers the period of 1950 to the present day, so it does leave out the 1929-1933 period. But the table does highlight the rarity of extreme sell offs.

Over a 60 year period there have been 10 years when the S&P was at least 15% or more away from its 200-day MA and only 4 years when it was 25% or more. The months, November 2008 and March 2009, when the S&P was trading more than 30% below its 200-day MA, are actually very rare events.

But the rarity of such events offers its own problem. If you were a buy-the-dip player and bought stocks when the S&P was 15% or more from its 200-day MA it would have been a tough call to have held those stocks as losses mounted in the latter part of 2008 and early 2009.

Even then, the 'average' frequency for a sell off greater than 15% from its 200-day MA is 1 year in 6. So if you bought at the 15% extension - then sold soon afterwards as losses continued - you could be waiting another 6 years for the next buying opportunity! However, one could be waiting even longer given the clustering behaviour of selloffs. There was a 13 year gap between 1974 to 1987 and 1988 to 2001.

The recent decline is interesting because it followed a lengthy range-bound (dull) period. The resulting fall garnered more attention because it was so hard and fast. As a result, it quickly extended itself from the slow moving 200-day MA, maxing at a loss of 13% from its 200-day MA on August 8th. While the S&P has recovered the bulk of this loss, the early August decline came very close to becoming one of those rare "15%+" events.

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.

What will history show ten years from now?

---------------------

Why not start your Zignals Trading Strategy Business with us today?

Learn How to promote your Zignals Trading Business with Twitter.

Follow us on twitter here

Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

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 your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.

JOIN US TODAY - IT'S FREE!You can use a Zignals market alert to track 15% declines; the SPY 200-day MA sits at $127.79 which means a "15%+" decline event will occur on a Price Crosses Below $108.62 . Because the 200-day MA is a slow moving average it may only be necessary to update the Crosses Below value just once a week, updating the value daily when the current price gets close to the trigger price.

Active Screen: CANSLIM v2 - Aug 25th

2011-08-25T07:31:00.000-07:00

I picked up on a comment left on a previous CANSLIM article in March 2011.

CANSLIM/William O'Neil does not use any YTD to Last YTD comparisions. I suspect, you used these as the site lacks a Q to last Yr Q for the last 3 qtrs. In addition, it is acceptable to have prior qtrs be less than 25%, as long as you have accelerating EPS gains and the last Qtr is above 25%. You should add sales growth (Q to last yr Q) above 25%. As for annual earnings gain, the last year should be 15%, with 3 yrs of growing EPS - a 5 yr growth rate of 25% is ridiculus - as it would exclude many growth stocks that have started their move in the past year. You should also add in profit margins of at least 18%. Just to ensure institutional quality stocks, screen for stocks >$12, 250K in avg daily volume and within 20% of it's 52-wk high.

In response, I have tweaked our original scan to take on board some of R. Paluszak's concerns. Some of the issues raised can be addressed in a later version of Stock Screener, but based on existing Screener criteria the CANSLIM screen will adopt the following parameters.

Topping the scan is still Apple (AAPL). The stock will get plenty attention today following Steve Jobs announcement. Premarket prices show it trading around $366 which is above a thick band of support running between $355 and $362. The 200-day MA has risen to $342 which will offer another tier of support. Will investors buy the news?

Second spot is held by Vale S.A. (VALE). But this is a stock which is struggling to recover from a 24% trim in price at the start of April. It's doing what it can to hold $24 support but it's hard to see it getting past its 200-day MA or 50-day MA anytime soon.

The new search criteria has brought Oracle (ORCL) onto the list in third spot. However, having lost its 200-day MA in July it has experienced a steady march towards lower prices. Primary support exists in a thick band between $21-$23, but given it was quick to cut through July breakout gap support at $26 buyers may be less willing to step in. One to avoid.

Fourth spot goes to CNOOC (CEO). Stock price action is also sickly, falling hardest once its 200-day MA was breached. It's attempting to find support around $180, but even if the stock does bounce it will quickly run into resistance marked by prior swing highs. Look for narrowing price action in the months ahead.

Fifth on the list is Barrick Gold (ABX). Unchanged from before is all one can say here. Stuck in the middle of its trading range.

Sixth was Baidu (BIDU). The recent decline held converged 200-day MA and channel support. As long as the sequence of higher lows and higher highs is retained the trend is bullish and buys are favoured. The one negative has been the tepid buying volume on up days compared to selling volume on down days.

Next up is Free McMoran (FCX). The stock has gone from breakout, to breakdown, to failed rally. It held $42 support which offers an opportunity for buyers to launch a second attack on $47 resistance. A failure to do so would bring into play next support at $32.

The final stock on the list is Priceline (PCLN). In the last update it was trading at support, but has since lost trend support on a gap down. It's in the process of confirming the break with a mini-rally. Shorts are likely to be active at current prices with the breakdown gap all but closed. A move above $500 would likely send them scrambling, but until then it may be one to sit out and see how it plays out.

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Why not create your own Active Stock Screen. Watch this video to find out more:

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Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

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 your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.

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How to Use Zignals Trading Signals

2011-08-18T08:37:00.000-07:00

If you are a subscriber to a Zignals trading strategy there are a number of different signal categories to consider. This post will tell you how to utilise them.

Buy Signals

When a position is initiated in a stock or forex pair it is triggered after the market close. These orders are listed in the end-of-day email delivered to subscribers and strategy previewers. In the case of strategy previewers these signals are delayed. Buy Signals refer to entry signal triggers for stocks which are already 'owned' in the strategy portfolio. Because Zignals strategies do not support compounding of positions, these additional Buy Signals are ignored. In effect, the Buy Signal is a confirmation ("Confirmed") order for an existing position.

However, new subscribers to a strategy will have portfolios which don't own stocks for which Buy Signals are triggered. In such cases, Buy Signals are used to time entries in strategy portfolios of new subscribers. The "Trigger Price" is then the price at which the order is filled and the earliest "Trigger Price" available is the next market open price. The caveat to this is performance of an individual strategy subscribed-to after inception will differ from strategy performance from inception.

Entry Signals

The difference between a Buy Signal and an Entry Signal is an Entry signal is a buy trigger for a stock which is not held in a strategy portfolio. All Entry signals are "Initial" positions. Because Entry Signals are generated after the market close the earliest price point to start a position is the next market open price. So the "Trigger Price" is considered as the next market open.

Short Signals

Short signals are split into "Confirmed" and "Initial" positions. As with Buy/Entry signals, a "Confirmed" short signal are for stocks already held short in a strategy porftolio. An "Initial" signal is a new short position opened at the next market open price. A "Confirmed" signal will act as an intial signal for new subscribers to a strategy for which the stock is not held in the portfolio.

Initial Buy/Short Update Signals

After a position is initiated, the first round of Target and Stop prices are calculated off the Market Open price. This information is delivered in the end-of-day email the day after an "Initial" entry or short position is triggered. For example, if a new stock trigger is intitiated after the market close on Monday, the stock will adopt a fill price at the next day open and calculate an initial Target and Stop price from this price. This information will be delivered in the Tuesday Signals Summary email (after the market close) and appear in Portfolio Positions (it may be necessary to rearrange the column order to view these prices).

The Target price represents the price at which the stop price rolls higher for a bought position or lower for a short position. The Stop is the initial protective price at which the strategy exits the trade if the market moves against the position.

Subscribers can track the current Target and Stop for any open position in the Portfolio of a purchased strategy.

Exit Signals

When a stock or forex position is closed the trade exits. Exits can either be at the "Stop", "Profit Target" or "Trailing Stop".

An exit at a "Stop" occurs when an initial position fails to reach its initial Target. An exit at a "Trailing Stop" occurs after the position reaches at least one Target price. A "Trailing Stop" may close for a profit depending on how many times the trailing stop has rolled forward. The "Profit Target" is the ultimate goal for a trade and is triggered as soon as the price is reached.

The majority of Exit signals come in two forms; an intraday email and end-of-day confirmation email. The intraday trigger occurs when the real-time price hits either stop, trailing stop or profit target. The end-of-day confirmation trigger occurs when the closing price qualifies to hit stop, trailing stop or profit target. This is an important distinction. Strategy trades only operate off the closing price, so a successful intraday stop, trailing stop or profit target trigger which fails to meet the trigger condition at the market close will not register as a trade in the strategy.

Updated Signals

Open positions which reach their Initial or Trailing Target price are updated with a new trailing stop and target price. This continues until the Profit Target is reached.

Unacted Signals

All strategies employ a Delay Between Trades to limit whipsaw signals. The length of this day can vary from strategy to strategy, but any stock or forex pair triggering an entry before the cool-off period has expired will have a listing under 'Unacted Signals'. The length of time to the "Last Exit" is also provided.

Leave any feedback or questions in the comments section of this post.

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Why not start your Zignals Trading Strategy Business with us today?

Learn How to promote your Zignals Trading Business with Twitter.

Follow us on twitter here

Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

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 your trading strategy in our MarketPlace to earn real cash.

Read what others are saying about Zignals on Investimonials.com.
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Active Screen - CANSLIM: Top 8 for August 11th

2011-08-11T08:24:00.000-07:00

Market selling shuffled the deck on top-8 qualifying stocks. Since the last update in July we have seen Cognizant Technology Solutions (CTSH) and Silver Wheaton Corporation (SLW) fall from the list and Priceline (PCLN) and FreeMcMoran (FCX) added, the latter making a return after its cut in May.

The CANSLIM stock screener settings employed were:

Top dog is still Apple (AAPL) and its market leading $338bn Market Cap. Shareholders have been reluctant to sell despite surrounding carnage. To the extent the stock only tested the February swing high at Monday's troubled close - a test which has so far held as support. However, a real bear market sinks all ships and while it may prove resistant to selling now, Apple is not immune too it. Apple does enjoy a thick band of support between $355 and $363. Should this give way, then the next area to watch for buying is $330.

Next on the list is Vale S.A. (VALE). The lack of buying interest around its 200-day MA quickly took its toll when sellers emerged in force. The stock cleanly sliced its 50-day MA, leaving it scrambling for support at the July reaction low. With a 'Death Cross' in play since May it's likely to encounter a glut of supply was it to challenge $30.

In third place is Baidu (BIDU). Like Apple it enjoys a well defined uptrend which has (so far) absorbed most of the selling thrown at it. June saw a successful test of its 200-day MA, and this swing low combined with the December low and April-July swing highs presents a solid bullish channel to guide traders. The presence of the 200-day MA nearby lends additional weight to channel support.

Fourth on the list is Barrick Gold (ABX). This is one of the few stocks to have changed little over the past couple of weeks. The stock remains stuck inside a broad $42-$55 range as it currently negotiates a flat-lined 200-day MA. A straightforward hold for now.

Next on the list is newly returned Free McMoran (FCX). However, it's return to the list may be brief. After a failed attempt to break from a consolidation in July it quickly undercut its 200-day MA and support of the prior consolidation. Next downside target is the September swing low at $33.

Priceline (PCLN) is the fresh face to the top-8. This is another steady performer along the lines of Baidu and Apple. Since the start of May its price has been 'coiling' in preperation of its next big move. This move should be higher based on the prior trend, but you wouldn't want to bank that in the current market environment. But a Zignals Stock Alert on a break of $550 will keep you informed when it does.

Netflix (NFLX) was one of the early channel breakers after its announced price hike. Therefore it's of no surprise it followed through to test its 200-day MA in the light of broader market action. Next question is whether it can bounce off it? So far, so good.

Finally, Agrium (AGU) has started to stir, although the omens are not good if you are bull. After a protracted sideways trading range dating back to last October, it rapidly sold off to $78 support. The Accumulation Swing Index shows a new low, which suggests $78 support won't hold for long. Next level of support is back at $50.

------

Why not create your own Active Stock Screen. Watch this video to find out more:

Take this a step further and build an Alert on to your Active Screen list.

Why not start your Zignals Trading Strategy Business with us today? Learn How to promote your Zignals Trading Business with Twitter.

Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

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 your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.

Match	No. of Patterns	1-day % Win	2-day % Win	5-day % Win	Average Return Per Trade (> 5 day)
Weakest	125	53	52	57	4.5
Weak	61	61	61	61	4.2
Neutral	28	64	67	66	3.9
Strong	6	83	83	83	2.6
Strongest	4	75	75	75	4.8

Match	No. of Patterns	1-day % Win	2-day % Win	5-day % Win	Average Return Per Trade (> 5 day)
Weakest	183	50	54	56	5.1
Weak	137	52	52	58	6.1
Neutral	69	46	43	49	6.6
Strong	24	51	42	33	5.5
Strongest	0	n/a	n/a	n/a	n/a

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