Melding Technicals and Fundamentals into a Trading Strategy

One of the key features of our stock screener is the Fundamental Trading System aka Active Stock Screen. This unique feature exclusive to Zignals stock screener will notify you on a daily basis (by email) of stocks which meet (or no longer meet) the criteria of your screen.

In addition, the stocklist created by the Fundamental Trading System will update every day AND you can use this stocklist as a basis for an alert e.g. when price crosses above the 20-day MA or price drops to within 2% of a 50-day MA + so much more.

So you can find out when the strongest stocks based on fundamentals are exhibiting the strongest technicals.

So how is a Fundamental Trading System set up?



How can I use my Fundamental System to generate trade ideas?
With a Fundamental Trading System created you can create a Stock Alert which acts on the list of stocks qualifying under the filters of the Fundamental Trading System. In the following example an alert is created for price moving within 3% of the 200-day MA and a second for a price cross of the 20-day MA. A more detailed video on using alerts can be found here.



Each day an email is sent showing new stocks which meet the criteria of the scan and those which no longer qualify.

If you have any questions on using fundamental trading systems and/or alerts simply reply in the comment section.

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 list 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!
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Create a Zignals Stock Alert (Video)

Produced by Dr. Declan Fallon, Senior Market Technician for Zignals.com. Zignals offers a range of stock trading strategies sold via members' unqiue Zignals home page. Each home page can be shared with friends, colleagues and clients who can subscribe direct to their trading 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 list 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!
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Stock Alerts in Action

Following yesterday's close we have a stock alert for a bearish cross of the 3-day EMA on the 5-dy for Avista (AVA), so this will be exiting the model portfolio.


If you would like a copy of this stock chart please email me [declan-at-zignals.com] with the stock name in the subject header.

Also on stop watch is Electro-Optical Sciences (MELA) which fell by 3.47% but also suffered a bearish cross of the 5-day EMA by the 3-day EMA.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts, and stock charts website
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Stock Alerts in Action

Two more stocks which gapped up 2% on Wedensday: Goodrich Petroleum [GDP] and Electro-Optical Sciences [MELA]. These were two of fifty-one stocks meeting the criteria. The stock charts below show key price areas and zones to watch.



Listed in this week's WallsStreetSurvivor portfolio. Current holdings:


Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts, and stock charts website
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Stocks in the Blogosphere

Making the most of blogosphere stock watch with Zignals stock alerts and stock charts.

Wall St Warrior featured Amgen (AMGN)

The first chart is daily chart of AMGN, which shows why it is having such a hard time breaking out of the $64-65.00 range. There are lots of pivots dating back to 2006 which are getting in the way of a smooth BO. Last week it failed at $64.00, but has continued basing in a tight range so I have kept it on my focus list. Today, it finally broke $64.00 and was setting up a nice C&H pattern at $65.00. It was no surprise that the C&H pattern failed.

Amgen (AMGN) looks like it will remain choppy until it clears $66.06. Set an intraday price alert for $66.16 to watch for a breakout, or $58.51 to take advantage of a pullback and let the stock come to you.


AC Investor has three stocks for Friday, one of which is the ever popular Apple (AAPL)

AAPL - The stock might face a period of sideways action while it consolidates the gains booked in the last session. The stock will face short to medium term resistance at $180.91. Once this level is crossed with good volumes, the stock can go to $190.

On the Stock Alert front set for an intraday break of $181.99 ($182.09) or a drop into $142-$162 range.


Finally, Downtowntrader took a look at PetSmart Inc (PETM)

PETM is a nice example of a confirmed double bottom. A lot of traders see the W forming and assume it's a double bottom, but in fact a double bottom is only confirmed once the stock CLOSES above the neckline (or top of W). A large number of these patterns fail before closing above the neckline, and usually end up forming some sort of descending triangle.

Notice how PETM did in fact close above the neckline. The way to measure a target for this pattern is to measure the distance from the top to the bottom of the pattern. This yields a target of 6 points, which would take PETM near 31. Of course there are no guarantees it ever gets there. Here is a link to double bottoms on a great site for chart patterns and how to trade them.

Since Downtowntrader featured this stock the initial break of the double bottom neckline failed, so if the move is to restablish price will have to close above $25.50 (or $26.41 if going by highs). Set alert two alerts; a close above $25.50 (alert for $25.61) and an ask price greater than $26.41. If these trigger set a new alert for a $6 move.


Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts, and stock charts website
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News from the Blogosphere

Vacation season is in full swing, but news doesn't stop.

MarketClub on bottoming behaviour (pork bellies and gold are examples). Not sure the current market is doing likewise? But maybe the homebuilders?

Barrat's ready to move?


MarketClub also has a guest article by Harry Boxer on four characteristics of Strong Breakouts. Here is an Zignals advanced stock alert setting which searches for low volume tests of the 7-day MA (it looks for breaks of a 7-day MA - comparable to an hourly 40-period MA test). When the alert triggers add the stock to your watchlist, or set a second alert for the stock looking for a gain of 2% or more in a single day on 150% of a 90-day MA volume with or without a new 10-day high.


Characteristics of bull and bear markets.

Presidential returns in the market.

(Via Abnormal Returns Who should you follow (and ignore) in the market?

(Via Abnormal Returns). Barry's rules of the road:

Ignore market rumors

Buy sector strength (and avoid sector weakness)

Never blindly follow the big money

Day-to-day stock action is mostly noise

P/E matters less than you think

Ignore deteriorating fundamentals at your peril

Nothing is more costly than chasing yield

Know what you own

Simple is better than complex

Stick to your core competency

Fess up!

Never forget risk management

The trend is your friend

(Via Abnormal Returns). Is the dollar bear market over? Afraid-to-trade thinks so.

How Russian ADR's, ETFs, and affected trading instruments reacted to recent events in South Ossetia.

Aleph Blog looks at the fundamentals of market bottoms.

Technical summary of Friday's close in the Nasdaq.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts, and stock charts website
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Stock Alerts in Action

Onyx Pharmaceuticals (ONXX) shed a bucketload after earnings failed to excite despite the positive spin. An alert for a 1-day drop of 5% or more was triggered so we will be looking to sell from our model portfolio at the open:


Will take a look at another 2% gap stock to take its place. Current candidates include:

Alliance Data Systems (ADS)
American Commercial Lines (ACLI)
Armstrong World Industries (AWI)
AstraZeneca (AZN)
Avista (AVA)
Banco Itau S.A. (ITU)
Beacon Roofing Supply (BECN)
Buffalo Wild Wings (BWLD)
Cummins Inc (CMI)
Dry Ships (DRYS)
Genco Shipping and Trading (GNK)
Hanger Orthopedic (HGR)
HealthSpring (HS)
Keynote Systems (KEYN)
NTT DoCoMo (DCM)
Owens Corning (OC)
Reynolds American (RAI)
Siemens AG (SI)
Steris Corp (STE)
Switch and Data Facilities (SDXC)
Temple Inland (TIN)


Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts, and stock charts website
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Stock Alerts in Action

I've set up a sample portfolio on Wallstreetsurvivor.com under the username "Zignals" to test a strategy similar to the 2% gap stock alert.

[1] Scanned for stocks which gapped 2%

[2] Eye-balled the four best candidates and entered a hypothetical trade


[3] Created a Stocklist on Zignals.


[4] Set two alerts:

One that alerted on a 3-day EMA cross below a 5-day EMA

A second that alerted on a 1-day loss of 5%


The first alert provides a sell signal. The 2% breakout gap on which the trade is entered will provide a boost of strength to the fast moving averages. When the momentum fades the more responsive of the moving averages (3-day EMA) will drift below the slower (5-day EMA).

The second alert is a fall-back for a stop price; we would look to exit if the stock made a 1-day drop greater than 5%.


We will adjust strategy as appropriate, altering the buy/sell triggers to suit market conditions.


Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts, and stock charts website
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