When I ran the data the raw daily totals for last week, there was a surprise. They ended with a solid edge to the sell side. The final score for the week was 122 to 51, Sells over Buys. The week before, buys had a solid edge, 185 to 71. That compared with 187 to 146 Buys over Sells, the week before that. Buys also led three weeks ago. The balance had been consistently tilted to the buy side since March 4.
The preponderance of sell signals last week suggests that it’s time for a consolidation, at least. However, when I reviewed the final screen of the week’s previous signals, I didn’t see anything I liked as a short sale.
The screen results come from a universe of approximately1200-1500 stocks daily that meet the criteria of trading above $6.00, and with average volume greater than a million shares per day. The final numbers show the number of stocks with at least one buy signal or sell signal during the week.
On Friday, March 25 alone, there were 23 buys and 25 sells. It seems to contradict the gain in the market averages Friday, but it’s narrow enough and small enough to indicate that it’s merely a function of the fact that the buy train has left the station. It’s not a sign that the train has reached the end of the line.
I screened the lists of previous daily buys and sells from Monday through Thursday. From that ouput, I looked for additional signals in the progression on Thursday and Friday. The final lists resulted in 12 chart pick candidates on the buy side and 15 on the sell side. I reviewed those visually, and also looked at final signals triggered the week before.
After reviewing those charts, I chose 3 to add to the list (subscriber version only). All were on the buy side. This string of all buys is now 3 weeks old. That’s a shift from the prior 3 months when all picks were on the short sale side.
Adding those buys this week leave the list with no open shorts and 8 buys.
Last week we started with 7 picks on the list. There were two shorts and the rest buys. The shorts hit their stops with small losses. Including those and the picks still open at the end of the week gave the list average gains of 2.0% with an average holding period of a week.
The week before saw an average gain of 5.3% with an average holding period of two weeks. This was with mostly longs. The week before that saw an average gain of 10% on an average holding period of 19 calendar days. That was with all shorts. So the screening method reversed positions right on time, in going from short to long.
The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.
The new picks, along with picks that remain open, and those closed out last week, are shown on the table below. Charts of new and open picks are below that.