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In Search of Winning Stocks
This Week: Screening for Potential Downward Reversals 1. Screening for Potential Downward Reversals 2. Search Criteria 3. One Stock Staging A Potential Downward Reversal 4. Disclaimer ***********************Our Sponsor************************* FIRST USA Get the credit card that offers a 1.9% Intro APR, NO Annual Fee, online bill pay, online account management and 100% fraud protection! ApplyNow! http://quinst.com/clk/qiaoshuaidajiukuo ************************************************************ Wall Street City's Stock Search of the Week 1. Screening for Potential Downward Reversals Based on the name alone, Potential Downward Reversals sounds like a search strategy that is designed for traders who looking for stocks to short. While certainly the search strategy works well for purposes of identifying stocks that may be attractive shorts, the strategy also benefits investors with long positions by helping them to determine when to start considering taking a profit. The reason is that once an upward trend is broken, a stock can potentially fall to prior areas of resistance or lower, thereby cutting into or completely negating profits. Therefore, knowing when to sell a stock is as or perhaps even more important than knowing when to buy it. The strategy is based around three technical criteria - six-week relative performance, one-day relative performance, and the one-week change in the accumulation distribution ratio. A minimum gain of 10 percent over the past six weeks is required to screen for stocks that have recently appreciated in price - an upward price trend. This group is then screened for a one-day decline in price combined with a recent, negative change in accumulation distribution ratio. The accumulation distribution ratio is a proxy for measuring buying and selling pressure and combining it with a decline price suggests that sentiment may be shifting against a stock. It is important to note that this strategy screens for potential reversals and the mere appearance of a stock in the results does not necessarily mean that it is experiencing an actual price reversal. Instead, the strategy should be used more a starting point for determining when an exit or short strategy should be implemented. Investors are encouraged to look additional signs of a trend reversal, such as negative breakout in the MACD, Wilder RSI or moving average indicators. The search strategy is designed to be run on at least a daily basis. Investors can click below to see the current results. http://clyde.investools.com/T/A28.146.836.1.113719 2. Search Criteria By subscribing to Wall Street City, investors can utilize Power ProSearch to build a search like the one below, created by Wall Street City analysts, to identify stocks that may be at risk of trending downward after having made a strong upward move in price. Indicator Mode ------------------------------------------------------------ Rel Performance 6-Wk Between 110.0 - 99998.0, High Rel Performance 1-Day Between 10.0 - 98.0, Low Acc. Dist 1-Wk Chg Between -999.0 - -1.0 Volume 30-Day Average Between 250.0 - 99998.0 Investors can click below to view the search stategy's results. http://clyde.investools.com/T/A28.146.836.2.113719 3. One Stock Staging A Potential Downward Reversal Mohawk Industries {MHK} was trading down by 8.6 percent at 11:30 a.m. EST this morning on news that it would be acquiring Dal-Tile International {DTL}. Investors are balking at the price tag, which places a 31 percent premium on the value of DTL - based on yesterday's closing prices. Prior today, MHK had been making a strong rebound, appreciating 71.6 percent since September 21. Today's volume, already the highest in five months, suggests that this rebound may finally becoming to an end as many investors are taking profits. Investors can click below to view the search stategy's results. http://clyde.investools.com/T/A28.146.836.3.113719 ***********************Our Sponsor************************* FIVE Recent +100% GAINS! Profits in Bull AND Bear Markets! While stocks fizzled, Bernie Schaeffer's option plays scored again and again-- 17 +100% winners this year! Profits in bear AND bull markets! Limited dollar risk and exposure. And REAL leverage. Get 12 brand-new option picks; FREE for 30 days: http://www.investools.com/c/go/OPTI/WSCE-optiTP6?s=S600 *********************************************************** 4. Disclaimer WallStreetCity's Stock Search of the Week is published solely for informational purposes and is not a solicitation or an offer to buy or sell any stock, mutual fund or other security. The information obtained from internal and external sources is considered reliable, but has not been independently verified for accuracy and completeness. WallStreetCity, its employees, and/or officers and directors, may from time to time have a position in the securities mentioned and may sell or buy such securities. Trading involves risk, including possible loss of principle and other losses. Trading results may vary. No representations are being made that these techniques will result in or guarantee profits in trading. Past performance is no indication of future results. REMOVE ME FROM THIS FREE EMAIL LIST To be removed from the email distribution list for the FREE WallStreetCity's Industry Group Analysis Commentary, Stock Search of the Week Commentary, The Week Ahead Commentary and Updates simply click the link below and hit "Send" on the email that is launched. 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