Hi MMH, Cush is out of town for a couple of days so he asked if I could have a look at your question.
Well that’s quite a request and quite a stock move in CIT on Friday. CIT is in the financial sector so things are very volatile and driven by press releases, TV talking heads, gov on TV (Bush, Paulson, Bernanke etc. putting their foot in mouth etc.).
Movements in this sector are impossible to predict based on TA of price and volume, just too many "black swan" events coming out of nowhere. With respect to CIT it was an impressive move Friday, but take it in context, Thursday it went down 38%, Friday it went up 65% really just an exact retrace of the previous days fall on about the same volume. In the long run its down from mid $40 to $3, so its gotta go up about 1500 % to get back to there, kinda makes the 65% bounce Fri look pretty small in the big picture, if you where a long term investor.
The only things I can see on this one are, oversold (daily & weekly), long term downtrend, large daily price drop previous day and current price way below 200 day average.
So lets find some stocks that fit that category and run the scan from 1 day ago (IE eod Thursday) and see if we pick up CIT and some others. I'll call it the "High Roller, Knife Catcher, Bet It all on Black 23, Seven Times in a Row, Long Shot Lottery Scan". I think you get my point, you gotta do your own DD.
(this is in the advanced scan engine, but you can do the same thing in the basic engine)
[type = stock] and [SMA(50,close) * SMA(50,volume) > 500000] and [Close > 1] and [Close < 100] and [Close < 1 day ago Close * 0.80] and [SMA (3,close) < SMA (200, close)*0.6] and [RSI (7) < 30.0] and [weekly RSI (7) < 30]
This was the scan output and the gain / loss on Friday. CIT +61.5% GLG +4.5% SA +0.5% NG -3.8% PUK -5.3% SSCC -5.9% ETM - 17%
Scan basically looks for: - liquidity greater than $500K traded per day on 50 day average - close between $1-$100 - Close down greater than 20% - 3 day SMA more than 60% below 200 day SMA - RSI daily weekly looking for oversold,
Play around and see what you can come up with, these are just a few ideas. If you do ever get a scan that works reliably for these types of events, don't ever tell anyone, because as soon as you do it will become the go to trade and it won't work anymore.
I think I spent way more time on this than I should have, but hopefully yourself and others can follow how the scan principles are applied to build a scan and apply those ideas to other scan problems.
good luck Quasi
I don't work for Stockcharts, I'm just another user always trying to learn more and willing to share what I've already learned. Stockcharts.com Support Forum
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