Discover more from Upside Unlimited by Greg Duncan

Valuable tools, systems, insights, and educational content for beginning and advanced traders to push the limits of their performance.

Over 1,000 subscribers

Scan of the Week #17: 3 Weeks Tight [PAID]

When the market gets volatile, look for tight price action.

Greg Duncan

Aug 15, 2023

We’ve seen a decent amount of volatility over the past couple of weeks as the market corrects off of its highs. When this is the case, it’s a great idea to scan for tight price action.

Why scan for tight price action?

When price is trading in small ranges, especially as the general markets are trading in wide ranges, institutions are supporting price. They are the ones that will accumulate shares on weakness, and logical price action is their subtle way of doing so. Tight price action during market weakness or volatility is also another subtle clue of relative strength.

You want to be tracking these names because if/when the market’s weakness wears off, these are likely the first stocks to get bought up and lead the next trend higher.

This week’s Scan:

Key Criteria:

20D Performance > 0 but < 5%: There are typically 20 days in any trading month (which, yes, is a little longer than 3 weeks) but I am interested in names that have only traded within a 5% range during this entire span.
RS Scores 1M, 3M > 70: I want to filter down the results by adding in RS scores over the past 1M and 3M. This will allow me to be focused on the best of the best.
% Off 52-week High > -15%: The depth of the most recent correction in the QQQs is only 6%, so I am looking at names that are less than 3x that range off their 52-week highs. Again, I implement this filter to ensure I’m looking at the strongest names meeting the 3WT criteria.

Notable Results To Keep Track Of:

AMZN: Watching how this continues to develop above the 10EMA. Today’s volume tracked lower than yesterday’s and is holding the lows on the 65min chart (bottom left). Watching for an undercut & rally on this level tomorrow if we open weak, or on strength a gap & go scenario where today was a shakeout.

ANET: Nice buyer on the $174 level as this continues to shape up well overall. RS line doing exactly what a leading name should be doing, and recent volume on gap up show institutions are all over this. 65min chart (bottom left) consolidating but holding lows. Topside breakout level would be in the $182s if inclined to take it.

GOOG: Closed just above the 10EMA today, watching how this develops above the $128 level on weakness and $132 level on strength. Not much to do here until the stock breaks either level… Again RS line doing exactly what we want a liquid leader to do…

In any case, I’m not super bullish nor am I super bearish. Sitting in 100% cash waiting for an overwhelming majority of the stocks on my watchlists to shape up in a buyable manner, something that is not present in the current environment.

Talk later this week,

Greg