Today the markets gapped lower then struggled to get back above the prior day’s floor trader pivot level. The markets closed on a strong note near their high of the day, but just a fraction above their one day pivots. You should be able to see commentary and charts covering today's market action in another post here today.
The lower open, strong close creates a pattern of the market potentially bouncing off key support. This is a good time to to use HotScans look for stocks trading on volume that have outperformed the market. Strong volatile stocks in a weak market can have potential for day trading or swing trading set ups.
Fist I scanned for stocks that closed on good volume over the prior day’s high and that yielded a lot of interesting patterns, but since the market has just experienced a pretty big swing from its highs two day’s ago to its opening low today, I decided to make the scan a little more strict.
The image below shows the results and the settings for scanning for stocks that closed over their 5-day high. This means they have cleared their intra-day highs of last Thursday which was the market’s recent swing high. I also required greater than average volume so I know they were trading on volume as they moved up today.
This is nice tight list of stocks with potential for day trading breakouts, or trading reversals on a day trading or swing trading basis. I don't expect the scan will result in stocks to buy right away. I'll find those that fit best for the day trading and swing trading systems we follow.
Note that I've focused on the long side in this post. I'm doing similar a scan for stocks on the short side using the 30 day lows as a frame of reference.