To begin with we need to learn the basic of the indicators ADX and PPO,
ADX - Average Directional Index
Measures the strength of a trend. Thats it.
Eager to learn more about this like me visit:
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:average_directional
PPO - Price Percent Oscillator
Measures the difference between two moving averages as a percentages of the larger moving average.
(Consider this as a zoooomed in version of MACD).
Lets get to the Pinch setup.
The Highlighted area is where the ADX PPO Pinch occurs. This just means that the moving averages are separated by the negative movement, (Moving averages separated by large % means the drop was quick) and the trend is strong.
Well, a word of caution, just because something falls rapidly, doesn't mean its gonna bounce, Bounce happens when ground is reached, This ground level is different for every ticker you play.
How to scan 'em using stockcharts.com (use this argument on any scanner)
//General Scan Criteria
[type = stock] and
[country = us] and
[daily volume > 50000] and
[daily close < 20] and
//ADX-PPO Criteria (using 13,21,8 - all fib numbers on PPO) (using 10 time period on ADX, representing 2 week)
[daily ppo line(13,21,8) <= -15] and
[yesterday's daily ppo line(13,21,8) <= daily ppo line(13,21,8)] and [daily ppo line(13,21,8) <= 10 days ago daily ppo line(13.21.8)] and
[daily adx line(10) >= 50] and
[yesterday's daily adx line(10) >= daily adx line(10)] and [daily close > 1]
-
Hope this helps traders.
ADX - Average Directional Index
Measures the strength of a trend. Thats it.
Eager to learn more about this like me visit:
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:average_directional
PPO - Price Percent Oscillator
Measures the difference between two moving averages as a percentages of the larger moving average.
(Consider this as a zoooomed in version of MACD).
Lets get to the Pinch setup.
The Highlighted area is where the ADX PPO Pinch occurs. This just means that the moving averages are separated by the negative movement, (Moving averages separated by large % means the drop was quick) and the trend is strong.
Well, a word of caution, just because something falls rapidly, doesn't mean its gonna bounce, Bounce happens when ground is reached, This ground level is different for every ticker you play.
How to scan 'em using stockcharts.com (use this argument on any scanner)
//General Scan Criteria
[type = stock] and
[country = us] and
[daily volume > 50000] and
[daily close < 20] and
//ADX-PPO Criteria (using 13,21,8 - all fib numbers on PPO) (using 10 time period on ADX, representing 2 week)
[daily ppo line(13,21,8) <= -15] and
[yesterday's daily ppo line(13,21,8) <= daily ppo line(13,21,8)] and [daily ppo line(13,21,8) <= 10 days ago daily ppo line(13.21.8)] and
[daily adx line(10) >= 50] and
[yesterday's daily adx line(10) >= daily adx line(10)] and [daily close > 1]
-
Hope this helps traders.
4 comments:
Scan result from Dec 9th 2013 - VMEM, 40% so far Dec 17th 2013.
How often do you find stocks coming up in this scan? I have been backtesting it (it is really successful) but rarely find that stocks come up under these criteria. Am I mistaken? Thanks
I have been backtesting this stockcharts search over the last few days. I have found it pretty successful; however, not that many stocks come up in the scan each night, if at all. Is this something that you find also, or is there something wrong with my scan?
Thanks
Peter
@PETER, The conditions i mentioned in this would be a little extreme.
I need to take a look at ur scan to really comment any further. send me an email.
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