Last week I gave you ten stocks that were showing unusual volume activity but hadn't changed so much in price yet.
http://thequantinvestor.blogspot.com/2011/03/10-stocks-showing-unusual-volume-with.html
Well I though't I'd try and back up my post last week with some results a week later. Below is the one week performance of the stocks I said might rise.
close(3/23) close(3/30)
SNBC------3.30------------3.58------ + 8%
PZZI ------2.00------------2.05------ +3%
OVRL------2.32------------2.18------ -6%
PSMT------33.86------------36.57------ +8%
HBHC------32.47------------33.00------ +2%
HA ------6.07------------5.99------ -1%
GPOR------32.58------------35.41------ +9%
EEI ------20.16------------18.87------ -6%
PLAB------8.08------------8.91------ + 9%
WTSLA----3.55------------4.18------ + 18%
As you can see, their performance was quite impressive, with an average gain of 4.4%! For comparison the Nasdaq gained just 1.3% over that same time.
So this week I thought I'd do it again and give you ten more stocks showing unusual activity, with no price movement. This time, I'll try and improve on the measure a bit and make the assumption that increased volume isn't exactly what we're looking for, but increased money flowing into the stock is what we're looking for. Therefore I'll modify my metric from last week and change:
volume --> volume*price
or, in other words, how much money is exactly going into a stock. I believe this is a more accurate gauge of unusual activity because volume can be artificially inflated it the price falls, but a measure of pure money going into the stock accounts for this. Everything else remains the same, and for this week here is what the computer program picks up...
Symbol Money STDs above normal Price STDs above normal
PANL 16.5906 0.706
MBND 13.7489 0.7927
ACHN 10.2386 0.6756
GFRE 8.7188 -0.002
MSHL 7.4808 0.3453
ACTG 7.4762 -0.4468
VRGY 7.0326 -0.0187
ISIG 6.125 0.2311
MITSY 5.7848 0.2481
BSPM 5.7789 0.604
As usual, no promises, and don't make any investment decisions purely on my calculations. Do your own research.
Thursday, March 31, 2011
Monday, March 28, 2011
New Bat Computer Setup
So I've changed things up a bit and the Bat Computer will no longer be updated as a new blog entry everyday. Instead you can get the daily run for it via the link on the right.
Highly profitable stocks for day trading
Day trading for retail investors is a completely different approach to the stock market than standard investing. For those who choose to venture into this risky but potentially lucrative area, the waters can be turbulent and tumultuous. From increased transaction costs, to quick decisions, and a 9am-4pm job, eyes locked in front of a computer, the task can be both exhilarating and exhausting. There are also things that make it easier than long-term investing, such as not needing to read fundamentals, not caring about balance sheets, and being able to take bad days off and completely remove exposure to the market. I would even argue that many of the high-frequency traders running Wall Street today are glorified day traders...though some might argue with that statement.
In this post I will present to you some straightforward measures that can help you identify some potentially profitably stocks to day trade. I'll do this by proposing three different qualities day traders look for in a stock, and the simple equations you can use to calculate them. Finally I'll present the top 10 stocks that meet these qualifications. I myself am NOT a day trader, therefore I invite comments, criticisms, and feedback from those who do use these methods.
1. High intra-day price variably as a percentage of price.
This may be the most important quantification. Simply put, if the price doesn't swing significantly within each day, then you can't make money trading it. We can calculate intraday swing easily by taking the difference between the high and low prices of the day, then dividing it by the close.
Price Range = (PriceHigh - PriceLow) / PriceClose.
2. Total money that trades in the stock each day.
If a stock doesn't have enough liquidity and volume to back it up, then it really doesn't make it easy to get in and out of it. This can make an intended intraday position carry overnight, cause one to sell at prices lower than intended, or not even let you purchase in the first place. The total amount of money that needs to be traded within a day is obviously dependent on the amount you have to buy. $100,000 in money volume may be enough if you only trade in the hundreds of dollars, but $10,000,000 or more in money volume may be necessary if you trade in the tens of thousands. We can calculate approximately by,
Money Traded = PriceClose*Volume.
3. Low Change/Range ratio
Finally what we want in a good day trading stock is price action that doesn't really move much overall, just fluctuates up and down. This allows one to trade in and out many times, or take long/short positions in a stock. We can quantify this by the ratio of the price change from day-to-day divided by the price range. The lower this ratio is, the more the price oscillates around a mean.
Price Change / Price Range.
Using these three requirements I have described for you, here are 10 stocks that oscillate over 4% on average, on a daily basis, over the past 10 days. They also trade over $1,000,000 a day and have very low price change/price range ratios.
QUIK
DBLE
SCSS
DTLK
NVAX
WRLD
MERC
SCOK
TDSC
AMSC
As usual, I make no promises as to their performances, and I encourage you to do your own additional research and calculations before investing. But hey, if you can make 4% a day for each day this week, that's not to shabby...
In this post I will present to you some straightforward measures that can help you identify some potentially profitably stocks to day trade. I'll do this by proposing three different qualities day traders look for in a stock, and the simple equations you can use to calculate them. Finally I'll present the top 10 stocks that meet these qualifications. I myself am NOT a day trader, therefore I invite comments, criticisms, and feedback from those who do use these methods.
1. High intra-day price variably as a percentage of price.
This may be the most important quantification. Simply put, if the price doesn't swing significantly within each day, then you can't make money trading it. We can calculate intraday swing easily by taking the difference between the high and low prices of the day, then dividing it by the close.
Price Range = (PriceHigh - PriceLow) / PriceClose.
2. Total money that trades in the stock each day.
If a stock doesn't have enough liquidity and volume to back it up, then it really doesn't make it easy to get in and out of it. This can make an intended intraday position carry overnight, cause one to sell at prices lower than intended, or not even let you purchase in the first place. The total amount of money that needs to be traded within a day is obviously dependent on the amount you have to buy. $100,000 in money volume may be enough if you only trade in the hundreds of dollars, but $10,000,000 or more in money volume may be necessary if you trade in the tens of thousands. We can calculate approximately by,
Money Traded = PriceClose*Volume.
3. Low Change/Range ratio
Finally what we want in a good day trading stock is price action that doesn't really move much overall, just fluctuates up and down. This allows one to trade in and out many times, or take long/short positions in a stock. We can quantify this by the ratio of the price change from day-to-day divided by the price range. The lower this ratio is, the more the price oscillates around a mean.
Price Change / Price Range.
Using these three requirements I have described for you, here are 10 stocks that oscillate over 4% on average, on a daily basis, over the past 10 days. They also trade over $1,000,000 a day and have very low price change/price range ratios.
QUIK
DBLE
SCSS
DTLK
NVAX
WRLD
MERC
SCOK
TDSC
AMSC
As usual, I make no promises as to their performances, and I encourage you to do your own additional research and calculations before investing. But hey, if you can make 4% a day for each day this week, that's not to shabby...
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