Wealth-Lab Chartscript Culling Methodology
The following Methodology describes how to use the new
Chartscript Scans for culling stocks from an initial universe. The methods described below require additional testing and analysis before using the signals generated for actual trading. However, interested individuals should feel free to comment on the usefulness and/or accuracy of the methods.
We begin each day with our Final Universe List currently comprised of 23 equities:
BCSI COGT DCAI ELOS EXM EZPW FORD GDP HANS JUPM MCRI MFLX PARL SGTL SIGM SNDA SYNA TASR TOPT TRGL UBET USG XXIA
We then need to determine if any additional equities qualify for inclusion into our Final Universe List for the current trading day. To accomplish this task, we head over to the
Stocktables.com Web Site and begin the initial culling process. Using the Stocktables.com Method described by Jack Hershey, we create an 'initial sort' of stocks using the following criteria:
Rel Str (RS) Rank: 90
EPS Rank: 80
Minimum Price $10.00
Maximum Price $50.00
Lines per Page: 100
Sort by: Volume % Change
All Other Categories: Mark as
ALL
When necessary, altering the above criteria produces an initial sort of varying length. We want to have an initial sort comprised of about 100 equities.
Using the above criteria, we arrive at 120 equities on the morning of
Monday, 2005-04-25. Downloading the results in Excel format (.csv) allows for a quick copy and paste of the symbols list. You'll need
Winzip or another compression utility to open the .zip file.
At this point, we still need to eliminate any stocks that fall outside our desired Average Daily Volume, EPS, or Float parameters. I use Qcharts for this process. Anyone interested in a free trial of Qcharts should send an email to SRVZ, and he can provide the information necessary to sign up for the Free Trial.
We only keep equities which have the following criteria:
1. Positive EPS
2. Average Daily Volume > 200,000 shares
3. Float between 5 million and 60 million shares
Using Qcharts to cull the stocktables.com initial sort for the 3 criteria listed above, we arrive at the following list of 47 equities:
AMHC BEBE BUCY CDIS CEDC CHTT CMC CMN CMTL CYCL DCAI DHC ELOS FORD FTO GDP HOLX ISRG ISSC JLG JOSB KOSP LCAV LSS MCRI MCRS MDRX MFLX MTEX MW NSS PARL PGIC PRGS SNDA SYXI TIE TOPT TRGL URBN USG USNA USPI VLCCF VMSI VPI XXIA
The next few steps involve the use of the various
Chartscript Scans. Either using the Web Site Version of
The Hershey Equities Rank SCAN v.1.0.0 or The Wealth-Lab Developer Version, create a Wealth-Lab Watch List comprised of the
culled initial sort of equities (today 120 symbols culled down to 47). Run
The Hershey Equities Rank SCAN v.1.0.0 against the 47 symbols of the culled initial sort. This scan seeks only equities which cycle the appropriate number of times over six months, and as a result, possess a 'Hershey Rank.'
Running the list of 47 culled equities through the first Hershey Scan yields the following list of ranked stocks:
DCAI ELOS FORD GDP MCRI MFLX PARL SNDA TOPT TRGL USG XXIA
The above list of 12 ranked equities is our daily "Hot List." We compare our Hot List to the Final Universe List to determine if any of the Hot List stocks need to be added to The Final Universe List. Since each Hot List stock already finds itself in The Final Universe list, we have no additions to our Final Universe List on this day.
We now need to determine which of the above stocks and stocks from our Final Universe List currently find themselves "In Dry Up" based on their actual volume. Placing the above list and The Final Universe List into a second Wealth-Lab Watch List and running
The Hershey Equities Dry Up Volume Scan v.1.0.0 against the recently created List of ranked equities yields the following list of ranked equities with volume levels currently placing them "In Dry Up."
EXM, EZPW, TOPT, TRGL
Running our 4 ranked equities, which also find themselves currently "In Dry Up" against
The Hershey Equities Score Scan v.1.0.0 we see the following scores:
EXM - 0
EZPW - 5
TOPT - 0
TRGL - 0
We then monitor the above four equities in anticipation of receiving a trade signal.
Individuals desiring full charting capabilities should utilize
The Hershey Equities Rank v.2.0.2 Chartscript. Utilizing this Chartscript produces the same results in addition to permitting the saving of charts onto your hard drive.
The methodology outlined above currently finds itself in the development and testing phase. Feel free to alter, augment, or change any portion of the process to suite your trading needs. As always, I encourage any comment on the usefulness of the methodology, as well as, any individual changes your testing and analysis has found.
- Spydertrader
