NR7 Scan Filter Update & Candidates for 5-07-2007

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I spent some time this weekend trying to understand exactly what I was looking for with my NR7 scan. Jamie pointed out an article by Alan Farley that also helped. I want to see a stock that is unusually active, with a big range expansion, that contracts as narrowly as possible on declining volume, making the coiled spring. I made a refinement to my filters to narrow down the NR7’s from 100 to about 5-10 on average. I do this by comparing the largest range in the last 14 days to the range of the NR7, and taking that difference as a percentage of the closing price on the day of the NR7. I filter out the NR7’s by requiring this score to be 10 or greater. This scan catches some big recent movers such as DNDN, and culls down the non-movers significantly.

The results for tomorrow’s trading (5/7/2007) are:

VG, EPCT, DRL, AGP, HMA, GMO, ZRAN

Here’s the Stockfetcher code now as it stands for those interested:

/*NR7 Scan By Jamie and Prospectus
http://traderjamie.blogspot.com/
http://www.movethemarkets.com/blog/
_____________________________________________
Setup Custom Variables
----------------------------------------------*/
set{Range_Contraction, average day point range(1) 14 day high - average day point range(1) 7 day low}
set{Var1, Range_Contraction * 100}
set{NR_Score, Var1/ Close}

/*Filter out OTC and low volume stocks
----------------------------------------------*/
Show stocks where market is not OTCBB
and close is between 1.00 and 200
and average volume(30) is greater than 1000000
and volume is greater than 50000

/*NR7 Price and Volume contraction scan
----------------------------------------------*/
and average day point range(1) reached a new 7 day low
and volume is more than 20% below volume 1 day ago
and average volume(2) is below average volume(5)

/*Filter the NR7s to find setups of interest
----------------------------------------------*/
and add column NR_Score
and NR_Score is above 10
and sort NR_Score descending

/*Change date offset to get results from the past
---------------------------------------------------------*/
and date offset is 0

/*Lines below are just for chart formatting.
Change according to your preferences!
-----------------------------------------------------*/
and draw ema(5) and draw ema(13) and draw ema(21)
and draw average day point range(1) 14 day high
and do not draw average day range(30)
and do not draw Range_Contraction
and do not draw volume
and do not draw NR_Score
and add column high plus 0.02
and add column low minus 0.02

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com