Welcome to the Next Generation in

Stock Screening Technology

The Turning Point Screener utilizes a universe of more than 3,800 stocks.  A vast majority of this universe is represented by stocks trading above $1/share with an average trading volume exceeding 30,000 shares per day.  Stocks trading below these levels tend to produce a higher rate of undesired screener results, which simply results in a waste of the trader's time.  This universe typically produces more than enough quality trading signals on a daily basis likely to keep any trader as busy as could be desired.

The following screen descriptions define each screen and its output.  Also included are brief explanations as to why each has been included for trading purposes.  However, these limited descriptions barely scratch the surface of the trading possibilities that lie beneath these setups.  Further discussion of trading based upon these setups can be found in any of a number of technical trading books.  The Master Swing Trader and Trading For a Living, and for those new to trading, Come Into My Trading Room, are recommended. 

Basic Information

The first four columns of the screener that follow the stock symbol contain the following basic information:  

• Closing Price - Today's closing price for the stock

• Price Change - Today's absolute price change for the stock

• Percent Price Change - Today's percentage price change for the stock

• Average Volume - The stock's 50-day moving average of volume, which is displayed divided by 1,000.

The closing price and average volume information allow users to quickly identify stocks within any of the screen results that meet any price and/or volume requirements that they may have.

The price change information has been included not necessarily be used as a trading tool, but rather as a source of consolidated information that can quickly and effectively keep the trader in-tune with the stocks that are making big moves.

High Relative Volume

This screen does not indicate the stocks that have the highest volume traded for the day, but rather the stocks that display volume that is more than twice their 50-day simple moving average (SMA) of volume.  

Stocks displaying above average volume, especially when volumes exceed the 50-day average by 4 times or more, are often where the real excitement of the day lies.  These extreme volume levels indicate unusual levels of supply or demand.  Moves on volume well above average can often ignite further supply or demand, and at times, can lead to continued price action over the coming days and weeks.  But keep an eye out for non-supply/demand driven sources of high volume, such as secondary offerings.

Screen Output

The output from this screen is the multiple of the 50-day SMA of volume for the stocks displaying multiples greater than 2.0.  For example, if the 50-day average of volume for a particular stock is 1 million shares, and today 5.80 million shares traded, the screen would display "5.80", indicating that 5.80 times the average number of shares traded today.  When sorted by this screen, the stocks with the highest multiples are displayed first, providing a convenient order for a more detailed investigation into the causes of these volume spikes.

Narrow Bands

Narrow bands refers to a situation where the distance between the top and bottom Bollinger bands are at a relative minimum.  

With regards to volume and price movement, a narrow band situation often marks a relative quiet point, which, at times, precedes a period of sharp price movement.  Thus, this indicator can be useful in identifying stocks that are about to make large, sudden moves. 

However, determining the direction of any impending move is a challenge unto itself.  A common technique used to trade narrow band setups is to place entry stop orders on either side of the current price, possibly near the current band positions (stop-buy above, stop-short below).

Screen Output

Stocks displaying a narrow band pattern are identified in the output by a numerical ranking.  While not always the case, ideally, the lower the ranking, the better the narrow band setup, or the more narrow the bands.  The output for this screen reflects the results of a proprietary screening and ranking system that attempts to weed-out narrow band cases that are not of interest to the trader while leaving those that are more likely to make big moves.  

Indicator Settings

The Bollinger bands used are 2.0 standard deviations of the last 20-days of price from the current 20-day SMA of price.

NR-7

NR-7, or Narrow Range - 7, a term borrowed from The Master Swing Trader, refers to the daily price range being narrower than that for each of the preceding six days.  An NR-7 x2 refers to the situation where yesterday AND today display the NR-7 pattern.

This setup is conceptually quite similar to the narrow band setup in that an NR-7 day often precedes a day of sharp price movement.  Also in fashion with the narrow band setup, this indicator gives little if any indication of the direction of any potential price move.  As such, the trading technique discussed for narrow bands also represents one way of trading the NR-7 setup.  

Screen Output

Stocks displaying an NR-7 pattern are identified in the output by a percentage ranking.  The percentage represents the ratio of today's price range to the average range for the last 25 days.  Thus, the lower the percentage, the narrower was today's range with respect to the average range for the last 25 days.

NR-7 x2 patterns are indicated in the same manner as the NR-7's, but display an additional identifying prefix of X2.

Note that the output for NR-7 is situated adjacent to the narrow band output, such that stocks that screen for both indicators can be easily identified.  

EMA S/R

EMA S/R, or Exponential Moving Average Support/Resistance, indicates price approaching either the 50-day or 200-day EMA, and whether it is approaching from above (support) or below (resistance).  Cases where the stochastic indicator may support the setup by having reached an extreme value have been additionally noted.

The 50 and 200-day EMA's often display strong price support or resistance by marking turning points in stock trends.  This screen attempts to identify the situations where a stock has approached an EMA, found support or resistance, and has turned.  

The stochastic indicator can be helpful in identifying short-term over-bought and over-sold conditions.  This screen utilizes the stochastic by combining it with the base EMA signal, potentially increasing the likelihood of the S/R holding.

Screen Output

The output from this screen first indicates whether price is testing support (S) or resistance (R).  This is followed by the EMA (50 or 200) that is being tested.  A following Sto indicates that the stochastic %d is below 20% for a support signal or above 80% for a resistance signal.  A following Sto + indicates that the stochastic %d is below 25% and heading up for a support signal or above 75% and heading down for a resistance signal.  All of the possible outputs are listed below:

The cases displaying the Sto or Sto + suffix will likely be the highest quality setups indicated in this screen.  However, the cases that have not been confirmed by a stochastic signal have been kept in this screen as they may still provide trading ideas, especially when combined with the Band S/R signal.  Note that the Band S/R screen has been placed adjacent to this screen for simple cross-referencing.

Indicator Settings

The stochastic in this screen uses a 5, 3 setting.

Band S/R - Daily and Weekly

This screen identifies one of four situations regarding daily and/or weekly Bollinger Bands providing support or resistance to price.  The screen first identifies stocks that are trading near a downward-sloping, upper, daily, Bollinger band (band) or an upward-sloping, lower band.  Cases where the weekly band is near the daily band and is trending in the same direction are also noted.

At times, Bollinger bands can offer strong price support or resistance, especially when price contacts a band trending in the opposite direction to itself.  When support or resistance hold, price "bounces" off the band and begins trading in the opposite direction.  This can be true not only on a daily price chart, but also on a weekly price chart.  Therefore, additional levels of support or resistance may be found when price contacts both daily and weekly bands, which coincide in price and direction (rising or falling).  Note that daily and weekly band correspondence is a relatively rare event, one rarely displayed in the screener output.

Screen Output

Output from this screen indicates when a falling upper band or an rising lower band is being approached by price.  The term "wkly" following the band in question indicates that the weekly band corresponds to the daily band in price and direction.

Indicator Settings

The Bollinger bands used are 2.0 standard deviations of the last 20-bars of price from the current 20-bar SMA of price, where a bar is either a day or a week depending upon the timeframe

HITW

HITW, or Hole-In-The-Wall, a term borrowed from Alan Farley in The Master Swing Trader, refers to a downward price gap that marks the end of a major rally.

HITW's can act as a shock event, possessing the ability to initiate a down-trend from a prior up-trend.  The level of shock, and perhaps the likelihood of a HITW successfully marking the top, may be quantified by the size of the gap, how far the gap bar fell, its participation (volume), and the strength of the preceding rally.  As such, this indicator is typically used to identify potential shorting opportunities.

Screen Output

The output for this screen is defined as follows:

Likely the best HITW candidates are those classified as "hitw +", and as such should represent the first to be examined more closely.  The "hitw" and "no gap +" classifications are not as likely to be significant events, but have been included none-the-less as they may lead to ideas for potential trades. 

MACD-H Divergence

The MACD-H, or Moving Average Convergence/Divergence Histogram screen identifies divergences in the relative peaks of price and MACD-H.  This screen identifies MACD-H divergences in both the daily and weekly timeframes.

MACD is one of the more popular indicators used in technical analysis and is typically utilized as a trend-following tool.  While many trading strategies are based on the various components of the MACD, some of the most common include trading in the direction of MACD-H crossovers (when the histogram crosses the zero line, which is also when the fast line crosses the slow line) and in the direction of the histogram slope.  As such, many stock screeners include these screens (see MACD Setups for the related screens included in the Turning Point Screener).

As a trend-following indicator, the MACD typically follows price direction quite closely.  However, at times MACD and price diverge, creating a temporary imbalance, which signals a potential trading opportunity. 

A bearish MACD-H divergence is characterized by price reaching a higher high than at its last peak while the MACD-H forms a peak lower than its previous peak.  To form a true divergence, between peaks the MACD-H must cross below the zero line.  The opposite situation forms a bullish divergence: price traces a lower low while the MACD-H traces a higher low after first crossing above the zero line. 

Turning points at market/stock lows often display bullish MACD-H divergences and tops often display bearish divergences, which explains the desirability of this indicator.  It is important to note, however, that divergences also commonly print at points that do not prove to be market extremes.  For example, note the chart shown above.  The screener signals a bullish MACD-H divergence at the first MACD-H up-tick (first green arrow), which defines a higher low.  As the MACD-H is not always as smooth as desired, after ticking up, it is common for the MACD-H to tick down again, continuing its prior downward trend, which is the case shown here.  However, the bullish divergence signal produced three days later proves to be more reliable than the first.  

Screen Output

The output from this screen first identifies the data timeframe of the divergence: Daily (D), Weekly (W), or if divergences appear in both (D & W).  The timeframe is followed by the type of divergence: bullish divergence (bull) or bearish divergence (bear).  Finally, a numerical ranking between 1 and 100 is given to each occurrence (except for those displaying divergences in both timeframes).  The higher the ranking, the more pronounced the divergence. 

Indicator Settings

The MACD in this screen uses a 12, 26, 9 setting.

RSI Divergence

The RSI Divergence screen identifies stocks that display a peak-to-peak divergence between price and RSI. 

The RSI, or Relative Strength Index, is a momentum oscillator that was developed by J. Welles Wilder Jr. and compares upward to downward movement over a 14-day period.

A bearish RSI divergence is characterized by price reaching a higher high than at its last peak while the RSI forms a peak lower than its previous peak.  The opposite situation forms a bullish divergence: price traces a lower low while the RSI traces a higher low.

Screen Output

The output from this screen first identifies bearish divergences (bear) followed by bullish divergences (bull).  

Following the divergence-type is a ranking between 1 and 100, which is a combined indication of the relative amount of divergence displayed between price and RSI, and the height/depth of the first of the two RSI peaks/troughs. The higher the number, the more divergent the price and RSI have become and the more extreme the level reached by the first RSI peak/trough.

Indicator Settings

The RSI in this screen uses a 14-day moving average of the type used by Wilder (1/14 of today's value + 13/14 of the prior average value).

RSI Setups

The RSI Setups screen identifies RSI crossovers, or stocks that display RSI's that cross the 70% reference line from above or that cross the 30% reference line from below.

The RSI, or Relative Strength Index, is a momentum oscillator that was developed by J. Welles Wilder Jr. and compares upward to downward movement over a 14-day period.

The RSI crossing above the 30% reference line is commonly regarded as bullish while its crossing below the 70% reference line is commonly regarded as bearish.

Screen Output

Stocks that pass this screen are identified by the direction of the crossover:

   XO - up - The RSI crossed above the 30% reference line today.
   XO - dn - The RSI crossed below the 70% reference line today. 

Following the crossover direction is a quality ranking between 1 and 100. This ranking is a combined measurement of how long the RSI has been above 70% / below 30% before crossing over, how long since the RSI crossed the 50% level (in the opposite direction) before crossing over, and the level of extremity reached by the RSI prior to the crossover.  In general, the higher the ranking, the higher the likelihood of a significant crossover.  

Indicator Settings

The RSI in this screen uses a 14-day moving average of the type used by Wilder (1/14 of today's value + 13/14 of the prior average value).

Engulfing Patterns

The Engulfing Patterns screen includes the bullish and bearish engulfing patterns.  A bullish engulfing pattern is a daily-bar pattern that features an opening price below the prior day's low and a closing price above the prior day's high.  As such, the body of the pattern "engulfs" the prior day's range.  The bearish engulfing pattern is similar, but in the opposite direction: it opens above the prior day's high and closes below the prior day's low.

Hence its name, the bullish engulfing pattern is traditionally thought to be a bullish sign, potentially marking the end of a down-trend.  The opposite holds for the bearish engulfing pattern.

Screen Output

The basic bullish and bearish engulfing patterns described above are indicated by the output "Bullish" or "Bearish", respectively.  A proprietary system, based upon our research, identifies those bullish engulfing patterns that are more likely to rise in the following two weeks than the basic pattern, and are indicated by the output "Bullish +".  The opposite set of conditions associated with bearish engulfing patterns is indicated by "Bearish +".  

Tail

A tail, also commonly known as a shooting star, hammer, or finger, is a single bar price formation displaying a larger than average high to low range, but a tight open to close range, which lies near either the top or bottom of the daily range, making the tail "point" downward or upward, respectively.  Higher than average volume is desired for a quality tail formation.

Tail patterns that occur after a long rally or fall that point in the direction of the trend often mark turning points.  The tail pushes into at-least-recently uncharted territory, exhausts the trend and reverses, leading to a trend reversal.  The odds for a turning point being marked by a tail may be increased if the tail pokes through any major support or resistance.  However, a tail that prints early in a trend is often simply paving the way for continued price expansion.  It is also common to see price action following a reversal tail to behave as expected for one to two days, but then to see the tail taken out with a continuation of the original trend.  Thus, trading tail patterns are not without challenges.

Screen Output

The output from this screen indicates whether a tail exists by providing the tail's direction, either up (up) or down (dn).  The directional classification is followed by a numerical ranking.  The higher the ranking, likely the better the tail formation.   In an attempt to output only the highest quality tail setups, it is possible that some tails may not pass this screen.

High/Low 

The High/Low screen identifies stocks that, today, closed at new highs or new lows with respect to the price range of the last 6 months.  This screen further indicates if the event happened on high volume, and whether this expansion into uncharted territory is a new event or simply represents a stock that has been recently trending into new territory for more than one day.  

It is important to understand the distinction between our use of the terms "hi" or "low" and "new high" or "new low".  Both "high" and "new high" indicate that a new high was reached today.  The distinction lies in whether or not this is the first time in the last five days that a new high was made.  If this is, in fact, the first time that a new high was made in the last five days, it is classified as a "new high".  On the other hand, if price made a new high today, but a new high was also made at some earlier point in the prior four days, it is simply classified as a "high".

While this screen was included with no particular trading strategy in mind, it should certainly not be implied that these patterns can not be traded.  For example, a "high" with high volume could indicate an exhaustion peak.  A "new high" that just breaks into new ground and retreats may be signaling a double-top.  A simple "high" or "low" could be a momentum play.  Additionally, a "new high" or "new low" with high volume that follows through, signals a break-out that may be the beginning of a new trend.  An active trader could keep busy with this screen alone.

Screen Output

The output from this screen is defined as follows:

Top Patterns

This screen identifies four different, but related patterns, all of which are associated with testing the high of the last 18 months.  In addition to the cup and handle pattern, this screen identifies double-tops, triple-tops, and ascending triangles.   

A new high followed by a significant correction, which then rallies back to test the high, is called a double-top, and forms the cup portion of a cup and handle pattern.  Price fails to break into new highs as the double-top forms, and a second dip ensues, although not to the extent of the first dip, typically correcting by less than 15% from the high.  Upon recovering from this dip and reaching the same high for the third time, the handle is formed, completing a triple-top, and more specifically, a cup and handle.  An ascending triangle is yet another case of the triple-top, but one that is not as rigorously defined as the cup and handle with respect to the length and depth of the corrections.  For example, regarding depth, an ascending triangle only requires the second correction to be shallower than the first.  As such, all cup and handles are also ascending triangles, but an ascending triangle is not necessarily a cup and handle.

Triple-tops, and to an even greater extent, ascending triangles and cup and handles, are generally considered to be bullish.  General market wisdom holds that double-tops be sold and triple-tops be bought.  As special cases of the triple-top pattern, traders and investors look for high volume breakouts to new highs after the completion of a cup and handle or an ascending triangle.  Again, for a much more detailed discussion on trading these patterns from both the long and short side, we refer you to The Master Swing Trader.

Screen Output

The output from this screen first indicates the formed, or nearly formed, pattern (Dbl = double-top, Tpl = triple-top, AscTri = ascending triangle, C&H = cup and handle). 

This is followed by either A, indicating we are now at a point in time zero to four days AFTER the pattern completed, or B, indicating that we are at a point in time BEFORE the pattern has fully completed.  Of course, a B does not imply that the pattern will in-fact complete - the screener is simply identifying patterns that  have nearly completed. 

The third bit of information in the screen output is a number, which represents the age of the particular pattern in market days, beginning with the original high.

Finally, an "+" indicates that the pattern has completed and that the stock has broken-out to new highs on high volume today.

The following lists some examples of the output from this screen.  Note that days refers to market days, or weekdays.

Triple Screen

Triple screen refers to a trading system that was developed by Dr. Alexander Elder.  This system involves the analysis of stock charts in three different time frames (hence triple screen), and looks for confirming signals from indicators in all three timeframes to produce a final trading signal.  Analysis begins with the weekly chart, then moves to the daily chart, and concludes with an intra-day chart.

The allowable trade direction, whether long or short, is determined through analysis of the first screen, which is the weekly chart.  More specifically, trades should only be in the direction of the 26-week EMA as plotted on a weekly chart.  Thus, if the 26-week EMA is rising, only long trades are allowed.  If the 26-week EMA is falling, only short trades are allowed.  In Dr. Elder's original publication of the Triple Screen system, the slope of the weekly MACD-Histogram was used in place of the 26-week EMA.  As such, this screen incorporates both the 26-week EMA and the weekly MACD-Histogram in its output.  However, it only requires that trades align with the 26-week EMA.  The slope of the weekly MACD-Histogram is included for informational purposes only.

The second screen is the daily chart.  The indicators used in this time frame are the MACD-Histogram and Stochastic.  When corresponding to the signal from the first screen, a long signal is generated when the MACD-Histogram is negative (below the zero line) and ticks up, or when the stochastic falls below the 20% line.  The opposite scenarios produce short signals, again when corresponding to the signal from the first screen.

The third screen is used to pinpoint entries, and is done so on an intra-day chart, such as the hourly, 15-minute, or 5-minute.  As the Turning Point Screener is an end-of-day screener, the third, or intra-day screen from the Triple Screen system, is not considered in this screen. 

As such, this screen identifies stocks that are producing a long or short trading signal based upon the first two screens from the Triple Screen system. 

For more information on trading strategies using the Triple Screen system, we refer you to Come Into My Trading Room by Dr. Alexander Elder.

Screen Output

The output for this screen identifies stocks that are currently producing a long or short signal based on the first two screens of the Triple Screen system.  A trading signal is produced when the slope of the 26-week EMA corresponds to the signal produced on the daily chart by either the MACD-Histogram or Stochastic.  The screen also checks the slope of the weekly MACD-Histogram and indicates if it supports the trading direction dictated by the 26-week EMA.

The output from this screen first indicates whether a long (L) or short (S) signal is being given by a stock.  While only two indicators are necessary for a signal (26-week EMA and either of the daily indicators mentioned above), the next bit of information indicates how many of the four indicators analyzed (26-week EMA, weekly MACD-Histogram, daily MACD-Histogram, daily Stochastic) support the signal.  Thus, this number will be between 2 and 4.

The rest of the information in the output indicate exactly which of the four indicators support the signal.  As discussed above, the weekly indicators (W) include the 26-week EMA (e), and the weekly MACD-Histogram (m), while the daily indicators (D) include the MACD-Histogram (m) and Stochastic (s). 

The weekly indicators are followed by a number between 1 and 25, which represents the number of weeks that the indicator has maintained its present direction (either up or down).  Weekly indicator trends lasting longer than 25-weeks are simply labeled with 25.

The following summarizes the codes used in the screen output:

• First Bit of Information

  • S - Short signal

  • L - Long signal

   

• Second Bit of Information

  • 2,3,4 - The number of indicators confirming the signal

   

• Third Bit of Information

  • W - Weekly indicators that confirm the signal follow the W in parenthesis

  • D - Daily indicators that confirm the signal follow the D in parenthesis

  • e - 26-week EMA

  • m - Weekly MACD-Histogram if following the W, or daily if following the D

  • s - Stochastic on the daily chart

The following lists some examples of the output from this screen:

Indicator Settings

The MACD in this screen uses a 12, 26, 9 setting for both the daily and weekly timeframes.  The stochastic uses a 5, 3 setting.