Using Relative Weakness To Find Trades

One of my favorite go to day-trading strategies is finding relative weakness in the first hour. Usually when the market is showing strength, and a specific stock is trending down, expect it to trend down for the rest of the open, if not day. I keep a piece of paper next to my keyboard and as I find relative weak stocks in the first hour, I write them down. I have two ways of finding relative weak stocks.

  1. Using my Trade-Ideas Scanner, I have 3 scans that I pay attention to. The first is called “Explosive Down” moves (scans for stocks moving down hard/fast on volume), the second is just a “low” ticker, and the third is a “weak” scan (scans for stocks just trading down).
  2. Finviz: I run a simple scan showing liquid stocks that are down 1% from the open. I sort them by Relative volume in order to get the ones doing the most volume on the top (these usually have a better chance of trending down).
I do get some overlap of course, however, using both strategies I find many stocks each day that show weakness which I use to my advantage. I also do the same for stocks showing relative strength.
Below are examples from Today (January 18). These stocks came up on my Weak radar in the first hour and they proceeded to trend down for the rest of the day (I didn’t catch them, as a headache made me sit out afternoon trading).

The Charts

(all 5 min charts)

$APOL - Apollo Group Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$PM  - Philip Morris International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$DTV - DIRECTV 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Tags: $DTV, $PM, $APOL, $STUDY

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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