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Updated Swing Trading Signals for week ending April 10, 2009

I've spent some time this weekend experimenting with the Swing Signal screen that we use in the Alert HQ software. I have made two changes that have resulted in a smaller but more robust set of swing trading signals.

We still use the basic concept of stocks exceeding their upper or lower Bollinger Band and then reversing back inside the Bollinger Band envelope. The problem with this approach is that in some cases, the initial trend is still intact despite the fact that the stock is back inside the Bollinger Band envelope. In other words, the expected reversal is probably not occurring.

To improve our results, we have made the following two changes:
  • We have added a calculation of Williams %R to confirm that the price is really turning up in the case of BUY signals (coming out of an over-sold condition) or that the price is really turning down in the case of SELL signals (coming out of an over-bought condition).
  • We now require that the most recent closing price be higher than the previous day's high in the case of BUY signals and that the most recent closing price be lower than the previous day's low in the case of BUY signals.
The result of adopting these changes is that our previous list of 58 swing signals has been reduced to total of 25. There are now 15 BUY signals and 10 SELL signals. We think this list will meet your expectations as the technicals of these stocks now more closely match the classic swing trading approach.

To see this updated list you can check out the TradeRadar Swing Signals page. All 25 stocks are listed, plus we provide a free download in the form of a CSV text file which can be easily opened in Excel or any text editor. In addition to the signal and the stock symbol, we also provide some basic fundamental data to help you select the stocks that are of most interest to you.

For a more detailed explanation of how other aspects of the system works, click on the label at the bottom of this post.
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