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Holding Longs, Adding Shorts

Last week’s daily screens tilted away from the buy side and toward the sell side for a second straight week. The final score for the week was 254 Sells to only 45 Buys. The previous week it was 122 to 51, Sells over Buys.   Prior to that, the balance had consistently tilted to the buy side since March 4.

3/28/22 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.

This weekend was a different story. I found 4 charts that I liked enough to add to the list as short sales.

Technical Trader subscribers click here to download the complete report.

On Friday, April 1 alone, there were 10 buys and 46 sells, despite a bit of a recovery in the market averages.

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.

I start the weekly process by screening for daily buys and sells from Monday through Thursday. I then rescreen that output, for additional signals in the progression on Thursday and Friday. The final lists resulted in zero chart pick candidates on the buy side and 26 on the sell side.

I found that surprising, but I’ve learned not to argue with the numbers. Most of the time they foreshadow what’s coming pretty accurately.

I reviewed the charts from the final output visually. From that review, I chose 4 shorts to add to the list (subscriber version only).

Adding those picks this week leave the list with 5 open buys and 4 shorts. It suggests a transitional or mixed market without a strong trend.

Last week we started with 8 picks on the list. All were buys, no shorts. Three picks hit their stops and were closed as of the stop price. Including those and the picks still open at the end of the week gave us average gains of 3.4% with an average holding period of 10 days. That compared with an average gain of 2.0% and average holding period of one week in the previous 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 (subscriber version only). Charts of new and open picks are below that.

Technical Trader subscribers click here to download the complete report.

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