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Thursday, March 31, 2011

Looking for breakouts? Try our new stock screener

The Alert HQ lists of alerts and reversals are a great source for finding stocks and ETFs that are breaking out from down-trends or breaking down from up-trends.

Finding stocks that are breaking out of a messy consolidation phase can be a bit harder to do. The good news is that the Premium Stock Screener at our new site TradingStockAlerts.com has a neat way of doing it.

Putting the Trend Performance Score to work --

Start at the very top of this new screener where the focus is on recent changes. Set the Trend Performance criteria to "Somewhat bullish (>3)" and the Change in Trend Performance to "Bullish to Very Bullish (>1)"

What this means is that we are looking for stocks that have been moving sideways or upwards and are suddenly showing a noticeable move upwards; ie: a breakout.

If you want to eliminate those stocks that are already in an up-trend, you can add a couple of more criteria. For example, looking for MACD flipping to bullish or recent bullish improvements in the 50-day Moving Average will tend to help identify those stocks that are just moving out of their consolidation patterns.

Add some fundamental criteria --

Now that the chart pattern you are looking for is set, you can add some fundamental criteria. I always like to pick stocks that exhibit some "reasonable value" characteristics. The screener offers the ability to look for low Price-to-Sales, moderate PE, low Debt-to-Equity and low to moderate Enterprise Value-to-EBITDA among other criteria.

Give it a try --

The Premium Screener does require that you become a member of the TradingStockAlerts.com site but you can just register with a free account and be able to use all the features described above.

Give it a try and let us know what you think. It's a new site and we look forward to your feedback!

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