Scanning for Cherries

OK,

So trying to nail 10 stocks out of thousands is a little like trying to pick 10 best cherries out of a cherry tree...there are far more than 10.

I ran a new scan this morning and came up with 51 possible stocks to choose from. Not bad for a first paring even though I am sure there are more.

I took about five minutes to view the small chart page (candle glance on Stockcharts) that places 20 per page. These are larger than thumbnails and with P&F charting the patterns are dead simple to see. I pared 51 down to ten. That is my criteria right off the start. I can view ten per page without having to "next" to see the rest so it is easy.

In this case I was trying to come up with one that fits all my criteria, is in an uptrend and near a price trigger to trade and one or two others that are just trending nicely long or short.

Two have shown up on previous scans and they made the cut to ten. Then I got all excited and had some extra time to work on this...I changed my scan criteria and opened up the pipe...full tilt.

All US stocks (NYSE, NASDAQ, AMEX) between $10 and $45 with over 1,000,000 average shares per day traded.

Almost 700 selections. I pared them down to 51 (funny that number comes up again).

Comparing them to my current 10 selections is interesting. Not all of the ones on my trading list are on my 51. 5 are on both lists, 3 didn't make it based on volume and the other two based on not ideal chart patterning.

Now these visual scans are based on a smaller P&F chart so I need to expand these 51 to see the larger picture and determine if they still stand up to the test. I may modify my list, drop the lower volume stocks and the non-conformers. I have not actually traded these ones yet so I have no history one way or the other.

I'll post a list tomorrow once I get things nailed down. I will only have ten active trading stocks but I will likely keep up to 30 available as backups...perhaps set them up as sectors so I can rotate them based on that or even just to be sure that I don't get too heavy into one or two sectors. I'm not sure which way to go as either sector rotation or sector diversification, if not traded correctly, can be a problem.

Jeff.