Finding Breakout Stocks

//Finding Breakout Stocks

Hawk’s Scan Sentry Report July 24

Welcome to Hawk’s Scan Sentry Report. This is Sunday night with stock recommendations for for the week beginning July 25.

This week I was interested in determining which stocks are becoming the ‘new leaders’ within the recent rally. In order to qualify, the stock must make two consecutive new highs (or lows) over a specified look-back period, and then continue to make new highs afterward. Therefor, I also wanted to know how many of these signals have occurred in that same look-back period and how long ago the previous signal occurred. So, being a technical analysis toolmaker, I created a new indicator which would plot a dot on the chart when this signal occurred; and then this new tool would tag the dot with an ‘H’ for ‘High’ or an ‘L’ for ‘Low’ followed by a number which represents the instance of the of the signal over the look-back period. For instance, if this was the fifth time the price had made  consecutive highest closes over the look-back period, the plot would be tagged “H,5”. Below that tag I plot the number of bars since the last occurrence of this signal.  This tool doesn’t have a name yet so I currently refer to it in my technical analysis toolbox as simply HighestLowest.

I used this tool today to scan my usual universe of stocks which include all stocks in the NYSE and NASDQ which are over $5 and have an average daily volume >300000 shares . Below are some of the results of that scan. Since these are generally stocks which recently broke out of a trading range, you may want to look for a pullback toward the support level (which would be the previous highs before the recent breakout) for entry opportunities.  I generally look for confitrmation in the Arps Fear/Greed indicator and I like to use a bullish cross of the Arps Price Acceleration Oscillator Radar2 to time my entries.

Let’s see how this new tool works out.

And now for the stock recommendations….

Longs____ Shorts

KSS                 AF

FTK                 IR

APOL              AU

HP

May the trend be with you,

Hawk

Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor .

2018-01-08T08:34:48+00:00July 25th, 2011|Hawk's Picks|