Upbeat music plays throughout.
Narrator: So you've created a trading strategy and optimized your indicators, but you're having trouble finding stocks that go with it. Sometimes finding uptrending stocks is harder than you think. Here are a mix of ways to find uptrending stocks for a bullish trading strategy using the Scan tab on the thinkorswim® desktop trading platform.
On-screen text: Ways to find uptrending stocks: 1. Stocks above their moving average 2. Stocks near 52-week highs 3. Stocks with recent price gains or recoveries
Narrator: Hi, my name is Kiara. I'm on the trade desk here at Charles Schwab.
On-screen text: Kiara Thomas, Schwab Trade Desk
Narrator: So, before creating any scan, consider using tools to avoid thinly traded and penny stocks. I'll add a stock filter for stocks above $4 per share. I'll add a filter by selecting Add filter and clicking Stock. I'll change it to the close price and add a minimum of $4. Next, I'll add a Study filter. Click Volume and add Average Volume. I'll change it to the last 50 periods and greater than a million shares minimum. Okay, there are some commonly used indicators for identifying a trend. One of these is a moving average.
On-screen text: 1. Stocks above their moving average: Consider the 50-day moving average for
intermediate-term trends
A simple moving average is a formula that smooths out the day-to-day fluctuations of a stock's price by taking a certain number of days and calculating the average of their closing prices.
Narrator: In fact, you may already have a moving average in the system you want to use. So let's say as an example, we plan to trade the intermediate term using 50 days. I'll add it to the scan. The stock doesn't need to be 10% above the moving average, so I'll change it to 2% because if the price is well above the moving average, we may need to wait for it to retrace before we get an entry point. Now I'll change it to match the moving average I want: a 50-period simple average. If the price is trading above the 50-day moving average, it's more likely to be uptrending. However, that's not always correct. So we'll add another filter. The next thing we can do is look for stocks that are making new highs. A bullish trend is commonly defined as price making new highs and lows. Stocks at or near their 52-week highs are more likely to be uptrending as well. We can scan for those.
On-screen text: 2. Stocks near 52-week highs: Consider including with 5% of the high
Narrator: The default current price is 3% of the 252 period, which is about the average number of trading days in 52 weeks, which is a year. You may consider increasing the percentage to 5% to include stocks that may be a little more volatile and subject to higher swings. Let's run a scan with these filters and see what we get. Okay, from my search results, I'm going to select AEP in this example and paste it in my charts. Here's what we wanted to see. We notice here that the AEP stock had their 52-week high. Right now, the stock is trending upward back to the 52-week high and above the 50-day moving average.
So what if you want to find new trends that may be emerging? You can try this technique. I'm going to switch out the Near_high_lows for a price change.
On-screen text: 3. Stocks with recent price gains or recoveries: Consider 5% gain over the past 30 periods or 5% loss over past 252 periods
Narrator: In fact, I'm going to add two of them. The first one, I'm going to change to at least 5% greater than 30 bars ago. On a daily chart this is 30 trading days. This will help find those stocks that have had a recent surge. The second one, I'll change to 5% less than 252 bars ago so I can find stocks that may be moving sideways or might be recovering from a downtrend. Let's take a look at some of the results. All right, so out of this list here, I want to take a look at Celsius. So I'm going to paste this in my chart. Here we see that Celsius was downtrending the first part of the year. Then it flattened out. In February, the stock broke above the 50-day moving average, which is pointing higher. So this could be the start of a new uptrend. We used the moving average and the near highs to find uptrending stocks. And then we used price change to find stocks that might be emerging. If you've already created scans for your trading systems, adding these trending filters can help you find potential candidates that are nearer to your entry signals.
On-screen text: Disclosure:
On-screen text: [Schwab logo] Own your tomorrow®
