Scanning for Set Ups ... continued

In the last post we talked about a general scan that I use in an intemediate term bull market. If you consider that the market (and individualy stocks as well) do not go straight up but instead advance, pull back, then advance further; then it makes sense to try and identify stock purchases when stocks are pulling back. The reasoning for this lies in the desire to buy stocks at a point where you can reduce your risk of error; that is if you are wrong and the stock really is done moving higher, then you want to be able to exit without it taking a large part of your capital. Note, that a retrace works the same if the direction is down. In that case, the trend is down, stocks retrace higher, then resume their decline.

So here's a scan I run when an identifiable bullish trend is in place. It attempts to identify stocks that have been strong but are currently coming back in some and may offer an opportunity to purchase them.

Criteria: • Exchanges: NYSE AMEX NASDAQ(NM)
• Average Volume is at least 50,000 shares
• Virtual Volume is at least 50% less than Average Volume (30 day MA)
• Last Price is greater than 2
• Last Price is below 20-Day MA
• Last Price is above 50-Day MA
• Last Price is within 10% of 52-Week High
• Last Price is above 200-Day MA
• Last Price is within 10% of Lifetime High

A somewhat opposite scan looks for bearish retraces although I'm still exploring a better set of criteria for it.

Criteria: • Exchanges: NYSE AMEX NASDAQ(NM)
• Average Volume is at least 50,000 shares
• Last Price is below 50-Day MA
• Virtual Volume is at least 50% greater than Average Volume (30 day MA)
• Last Price is at least 2
• Last Price is below 20-Day MA
• Last Price is below 200-Day MA