kapilricha1's Blog : Combining results of fundamental and technical stock screener

On a stock which trends higher ... any method of entry works. I like price indications for entry as opposed to other indications which are functions of price. In any event, if you are working with a good list of stocks which are going to new highs, then your idea will work very well.

If you are new to this field, the best way to learn is diving in and buying and selling equities. You can read forever and do extensive analysis and never be a winner. I suggest getting you feet wet by buying in small increments, set goals, and abide by the stock market 101 rules. It's hard to see what kind of person you are without doing real processing. It's hard to sell when you have a small loss, and it's hard to sell when the stock is rocketing upward and you've hit your profit goal. It's easy to get greedy and end losing it all. You'll need to do both and see if you have it. You will have losses, you need to experience those. Sorry but that's the way it is.

I appreciate your comments. I am already wet in the market.... I started my journey with a loss but I am still patient and keep investing based on my capital capacity.

I also learned that averaging the stock also help sometimes if you feel that stock can reach to the average level.

Howdy, kapilricha1!

I think if we combile zacks rw results and stockfetcher.com results based on selecting combination of technical parameters then it can improve the chances of success. At this moment I am using a combination of stochastic and MACD. Any thoughts...

My first thought is you are very wise to avoid choosing between fundamental analysis and technical analysis in developing your approach to the equity market. In my own work, the former typically tells me what to buy and sell, and the latter typically tells me when to do it. As a result, I share your appreciation of both sets of tools.

Concerning moving average convergence/divergence (MACD) [http://tinyurl.com/2feps2] and stochastics (http://tinyurl.com/329vyq), I employ neither of them in my own brand of T.A., so you may wish to accordingly discount my comments on them here. With my bona fides thus duly discredited, I note I came across several months ago an old Credit Suisse First Boston (CSFB) Equity Research Quantitative Analysis report comparing the effectiveness of eight indicators widely used in attempts to identify overbought and oversold equities. According to CSFB:
-- The four most successful of these indicators were (from best to worst) Bollinger bands, five-day money flow, the commodity channel index (CCI), and the nine-day relative strength index (RSI).
-- The four least successful of these indicators were (from worst to best) Fibonacci range score, moving average convergence/divergence, 14-day stochastic, and Fibonacci score.

Personally, I employ variants of three of the indicators in the first group (i.e., Bollinger bands, money flow, and the RSI), and no variants of any of the indicators in the second group. (I also plan to revisit the CCI, which appears to deserve more than the cursory attention I gave it while considering its integration into my work years ago.)

Good luck!

MackTheKnife

Thanks MackTheKnife for the detailed explanation and guidance. As I said I am still learning so definately I will read more about the first group of TA indicators. I will also have to do some backtesting of those indicators to see if they are working for me at the same time. I read somewhere that TA indicators also have effect on how a person is looking at them.

Could you please throw some light out of the three indicators you use, how you decide which combination you are going to use or you just see all three TA details and make a judgement based on your interpretation of the combined effect.

Looking forward for your continuous guidance...

Thanks again for the detailed explanation.

Regards

Howdy, kapilricha1!

Thanks MackTheKnife for the detailed explanation and guidance.

My pleasure.

Could you please throw some light out of the three indicators you use, how you decide which combination you are going to use or you just see all three TA details and make a judgement based on your interpretation of the combined effect.

By way of background, I employ T.A. indicators in three broad classes -- trend indicators (e.g., simple moving averages), sentiment indicators (e.g., put/call ratios), and oscillators (e.g., the relative strength index [RSI]) -- as I attempt to identify likely areas of support and resistance for either an equity-market index (e.g., the Standard & Poor's 500 [SPX]) or an individual stock (e.g., the Quidel Corp. [QDEL]).

Ergo, I employ several other indicators in my work besides the above-referenced Bollinger bands, money flow, and RSI. In each of my evaluation packages for both market indices and individual issues, I have nine charts (i.e., one point-and-figure, four six-month daily, and four three-year weekly charts). However, there are differences in some of the chart metrics used for a market index such as SPX on the one hand and those used for an individual issue such as QDEL on the other hand. (I also refer to intraday charts from time to time, but I do not consider them mission-critical because I am not a day trader.)

For the purpose of illustration, one of my daily charts of SPX as of the close of business yesterday is here (http://tinyurl.com/y8suqpa) and one of my daily charts of QDEL as of the same time is here (http://tinyurl.com/yew5j5k).

Focusing on the Bollinger bands, money flow, and RSI with respect to SPX, I note the BBs are widening (suggesting to me the S&P 500 may be in a trading range for a while), the 20-day Chaikin money-flow indicator is at 0.218 (suggesting to me the S&P 500 has been not in distribution mode but in accumulation mode over the past trading month), and the two-day RSI is at 72.66 (suggesting to me the S&P 500 is neither overbought nor oversold in the extremely short term).

Focusing on the Bollinger bands, money flow, and RSI with respect to QDEL, I note the BBs are fairly narrow (suggesting to me the equity may be getting primed for a pretty explosive move), the 20-day Chaikin money-flow indicator is at -0.138 (suggesting to me the stock has been not in accumulation mode but in distribution mode over the past trading month), and the two-day RSI is at 38.97 (suggesting to me the name is neither overbought nor oversold in the extremely short term, but the appearance of the indicator shows it was oversold as recently as last Friday).

Good luck!

MackTheKnife