Question:
What is the highest possible score in the Breakout Tracker for the Demand Indicators (DI 20/40)? What is a good score?
My Response:
The scores can really be limitless in either direction. A stock that drops $20/share with very heavy volume could concievably have a DI score of less than -1000. In the opposite direction, a stock that soars on earnings or news could approach 1000. Of course DI scores this low or high are rare. Of course the higher the score the better, which indicates greater demand. To answer your question, I’d say that most of the DI scores are going to be in the zero to 100 range and that a stock with a Demand Indicator score that is above 25 is very good. However, you really want to use these scores in conjunction with the other information in the database. Where is the stock in relation to support levels at the moving averages? Where is the stock in relation to its pivot point? Maybe the stock has a great demand score but is way too extended past a proper buy point. The key is locating stocks showing big demand that are near support levels and/or within a buyable range from the pivot (break out) point. The Breakout Tracker makes this process incredibly easy for you. One screen that does this well is the "Hot Stocks" screen in the members area. This is a list of stocks at or near a breakout and/or within 5% of the 50 day moving average that are showing great demand. The list is sort so that the highest ranking stocks (according to fundamentals and technicals) are listed at the top, making it very easy to see the absolute best candidates the market has to offer right now. The "Hot Stocks" screen is the list that I always go to first for buy candidates.
Important Note: A DI Score close to zero isn’t necessarily bad. What it can indicate is that neither buyers nor sellers are in control and that there is a tug o war going on, which often results in a flat base formation.
This great question was asked on 1/24/2007 but as I post this (on March 30th, 2007) the top 10 list of Hot Stocks are:
1. Guess? (GES)
2. Garmin (GRMN)
3. Credicorp (BAP)
4. Zumiez (ZUMZ)
5. Vocus (VOCS)
6. Vimpel Communications (VIP)
7. NYMEX Holdings (NMX)
8. Smith & Wesson (SWHC)
9. FalconStor Software (FALC)
10. HealthSpring (HS)