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Rising ETFs and Stocks > 200-day Av

Companies / Investing 2009 Apr 20, 2009 - 07:45 AM GMT

By: Richard_Shaw

Companies Best Financial Markets Analysis ArticleIn prior ETF and stock screens, we did computerized quantitative filtering of the 183 largest ETFs and the 8000+ largest US listed stocks to find those with attractive price patterns using the close, the 20-day average and the 50-day average.  Now that so many stocks have passed their 200-day average, we have added one more criterion (close > 200-day average) to the original criteria that searched for short-term upward slant to price patterns.


Here are the first level criteria we used previously, but with the 200-day element added:

First Level UP Filter (8 of 183 ETFs pass):

  • Close > 20-day SMA
  • 20-day SMA > 50-day SMA
  • 20-day SMA > 20-day SMA 5 days ago
  • 20-day SMA  5 days ago > 20-day SMA 10 days ago
  • 20-day SMA 10 days ago > 20-day SMA 15 days ago
  • 50-day SMA > 50-day SMA 5 days ago
  • 50-day SMA 5 days ago > 50-day SMA 10 days ago
  • 50-day SMA 10 days ago > 50-day SMA 15 days ago
  • Close > 200-day SMA

These ETFs passed:

2009-04-17_sma-1_200

Here are the additional criteria for the second level more stringent test for short-term upward price pattern. We used these with the First Level criteria above, which include the 200-day element.

Second Level UP Filter Additional Criteria (3 of 183 ETFs pass):

  • Close > 5-day SMA
  • 5-day SMA > 20-day SMA
  • 5-day SMA 5 days ago > 20-day SMA 5 days ago
  • 20-day SMA 5 days ago > 50-day SMA 5 days ago
  • 20-day SMA 10 days ago > 50-day SMA 10 days ago

These ETFs passed:

2009-04-17_sma-2_200

For individual stocks, there are some 600+ out of 8,000+ that pass the First Level filter, and 438 that pass the Second Level filter.  Here are some of those 438 taken from the top of the list ordered by daily trading volume:

2009-04-17_sma-2_200stk

You need to look at more than price direction to make a buy, but finding otherwise attractive opportunities among stocks that are rising is a pretty good idea.

Unless you are a trader or someone who invests purely on chart information, you should use a fusion of approaches to find opportunities that meet these five tests:

  1. an appealing story
  2. solid financials
  3. attractive valuation
  4. a rising price pattern
  5. an absence of major obvious risk factors.

If you are income oriented, you should also have a dividend criteria (yield, payout ratio, and dividend growth).

By Richard Shaw 
http://www.qvmgroup.com

Richard Shaw leads the QVM team as President of QVM Group. Richard has extensive investment industry experience including serving on the board of directors of two large investment management companies, including Aberdeen Asset Management (listed London Stock Exchange) and as a charter investor and director of Lending Tree ( download short professional profile ). He provides portfolio design and management services to individual and corporate clients. He also edits the QVM investment blog. His writings are generally republished by SeekingAlpha and Reuters and are linked to sites such as Kiplinger and Yahoo Finance and other sites. He is a 1970 graduate of Dartmouth College.

Copyright 2006-2009 by QVM Group LLC All rights reserved.

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Do your own due diligence.

Richard Shaw Archive

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