My New Favorite Scan - Excellent Results Using SCTR and Rising PMO | ChartWatchers

If you watch MarketWatchers LIVE regularly, you've probably heard about my new scan. I've found, especially when the market has a bearish bias, that my original Price Momentum Oscillator (PMO) scan wasn't producing any results. I consider this a caution flag before I get too involved with the results of my new scan.

The original scan is below. Its requirements are quite high, so I won't get results in a bearish market; not only do I need a PMO on a rising trend, but the EMAs need to be configured bullishly. After the market takes a serious hit, there aren't that many stocks that will work with the scan. It is great for intermediate-term trades, though, as resulting stocks are on already on the right track.

// Narrows down the universe to stocks with decent volume and from the US
[type = stock] AND [Daily SMA(20,Daily Volume) > 100000]
AND [country is US]

// Keeps the penny stocks and high volatility stocks out of your results
AND [Close > 10]

// This identifies a PMO that hasn't yet had a positive crossover its signal line
AND[today's PMO Line(35,20,10) < today's PMO Signal(35,20,10)]

// This identifies a PMO rising for three days
AND [today's PMO Line(35,20,10) > yesterday's PMO Line(35,20,10)]
AND [yesterday's PMO Line(35,20,10) > 2 days ago PMO Line(35,20,10)]
AND [2 days ago PMO Line(35,20,10) > 3 days ago PMO Line(35,20,10)]

//This ensures we get a positive IT and LT Trend Model configuration
AND [today's ema(20,close) > today's ema(50,close)]
AND [today's ema(50,close) > today's ema(200,close)]

//This identifies stocks with SCTRs greater than 75 or in the "hot zone"
AND [SCTR > 75]

MarketWatchers LIVE is centered mainly on the short term. I need a scan that would give me good results for short-term investments; I think this scan serves that purpose pretty well.

[type = stock] AND [Daily SMA(20,Daily Volume) > 100000]
AND [country is US]

// Keeps the penny stocks and high volatility stocks out of your results
AND [Close > 10]

AND [today's PMO Line(35,20,10) > yesterday's PMO Line(35,20,10)]
AND [yesterday's PMO Line(35,20,10) > 2 days ago PMO Line(35,20,10)]
AND [2 days ago PMO Line(35,20,10) > 3 days ago PMO Line(35,20,10)]

AND [today's ema(20,close) > today's ema(50,close)]
AND [today's ema(50,close) > today's ema(200,close)]

AND [SCTR < 80]
AND [SCTR > 70]

The scan above doesn't require the PMO to be beneath its signal line. Additionally, it allows the SCTR to be potentially as low as 70, rather than 75. I really have been surprised by the results that return with just that little amount of tweaking. If this still isn't opening you up to enough results, I recommend that you go ahead and "comment out" some of the criteria. For example, I will sometimes let the PMO rise for 2 days (or even just for the day). Unfortunately, the hard work comes afterwards when it's time to analyze the results.

Here is part of a CandleGlance containing some of today's results.

To start with, I look for breakouts from resistance or declining trends accompanied by a good-looking PMO (one that is moving upward, not sideways or twitching). I then follow that with looking at any chart patterns that reveal themselves.

Looking at the results above, my interest lies with AEE and CMS (a breakout from a possible flag and challenging highs). It's just a small thumbnail, though, so I have to look at the charts. I've annotated both below. Of the two, CMS is more promising, despite a very similar price chart. My reasoning is that CMS has already broken above its March top while AEE hasn't.