For those traders or investors who are looking for stocks or ETFs to buy, the wealth of free information on the Internet is quite astounding. It can also be quite intimidating, so I thought I might review four of my favorite sites and how you might use them in your research.
Though my focus is on the technical, I don't discount the fundamentals, and therefore, one predominantly fundamental site is included in my list. The initial slides were generated on Tuesday afternoon after the announcement was made that US Airways Group, Inc., (LCC) and American Airlines (AAMRQ) reached a settlement allowing their $17 billion dollar merger to go through.
My research path often starts out at www.finviz.com, and the graphic below is a partial screen shot of the home page. This can give you a quick view of the day's market action. On the top, there is a ten minute intraday chart of the Dow Industrials, Nasdaq Composite, and S&P 500 (not included). (Editor's Note; Sections of the entire Web page had to be used so that they would fit appropriately within the article.)
Below the Dow chart (#1) is the combined advance/decline data from the NYSE, AMEX, and Nasdaq. It shows that 34.9% of the issues were advancing, while 58.9% were declining. Next to it (#2) is the combined new high and new low data for the same exchanges.
The front page also includes another valuable way to measure the market's health, that is, the number of stocks above their 50-day MAs. This is a data set for the S&P 500 that I often feature in the Week Ahead columns.
I pointed out in October (see chart), as well as late June, the number had turned up from levels often associated with market bottoms. In both instances, these changes coincided with positive signals from other technical studies, indicating that the stock market was bottoming.
The site also does a good job of screening stocks and separating them into lists, and examples are listed below the chart. They have the Top Gainers, (point a), as VNDA leads the pack for the day, up 95.29%. The links are dynamic and will take you to the entire list, which gives you a candle chart and fundamental data on each stock.
Next are the stocks that are making New Highs (point b) and also those that are considered Overbought (point c). These stocks are ones that have had "extreme price moves in the past two weeks," based on their 14-period RSI.
I generally start my analysis with the next list of filtered stocks, those with Unusual Volume (point d). This link will take you to several pages of stocks, starting with the one which has the most volume. On Tuesday, this was US Airways Group, Inc., (LCC), as 37 million shares were traded.
I further filter the "Unusual Volume" stocks by the average volume, (circled in blue), and use the descending order, as shown in this link. I do this since I am really only interested in stocks that trade at least 300K shares per day. Unusual Volume is just one of the choices available from the Signal pull down menu.
The candle chart of US Airways Group, Inc., (LCC) is shown on the left side of the page, with a news ticker underneath. Their software draws trend lines, and based on these different chart formations, they are also filtered into groups on the home page.
On the right side of the page is a three column list of fundamental data, (only two are shown). They provide information like the capitalization, dividend, insider ownership, % of the float that is short, as well as the average volume. The 52-Week range is also provided. Of course, you can also run scans, or filters, based on the fundamental as well as technical data to develop your own lists.
On Tuesday, the third stock on the list was JetBlue Airways Corp (JBLU), which is listed in Finviz as a Regional Airlines. Even though the merger news made Tuesday a bit different, my next step is to look at a chart of the industry group.
On each page you will see a header called Groups (outlined in red). This will look at the performance over different periods of the sectors, industry groups, all US listed stocks or stocks grouped by capitalization. For this example, I want to look at the industry group (point 1), and then bar chart (point 2).
This will give you an alphabetical list of all the industry groups. I have cut out the Major Airlines chart from this list. The group broke out of its trading range, lines a and b, in October, and is acting very strong.
Since this is clearly a market leading sector, I can click on the chart of the Major Airlines group and get a list of all the stocks in this Industry group (point 1). I generally then filter these by those which have an average volume of 300K or greater (point 2).
This gives me a list of stocks by performance, but if I choose charts (point 3), I get the candle charts of the five stocks (see below) that meet the criteria, all on one page. This allows me to quickly examine them to see if any look interesting. Generally, I look for those that are basing, or those that have had what appear to be normal corrections after a sizable rally.
In this case, I then look at the Regional Airlines group and notice that JetBlue Airways Corp (JBLU) had just overcome major resistance from the April and October highs. It was one of the more interesting charts, along with Allegiant Travel Company, LLC (ALGT).
Once I have found a stock to look at, I want to see how it is performing versus the overall market. One of the easiest ways to approximate my relative performance analysis is with stockcharts.com, which is a site that I have written about in the past.
Selecting Free Charts on the home page takes you to various lists of subgroups of stocks and ETFs. One that I use frequently is the CandleGlance: S&P Sector ETFs, as it has the nine Sector Select ETFs that I comment on regularly, as well as, the S&P 500. They give you the option of looking at two months, which is the default setting. You may also choose six months, one year, or a P&F chart.
My favorite chart type, as I reviewed in Learn to Drive Your Own 401k, is the Gallery View. This can be created in the pull down menu under Create a Chart in the middle of the page. This gives you two charts; the first is a daily chart with their Percentage Price Oscillator (NYSE:PPO) (quite similar to the MACD) on top, and the CMF (Chaikin Money Flow) below the candle chart on the bottom.
The charts are very clear and they allow me to quickly determine which sectors are acting the best and worst over the last few weeks. Also, by clicking on any one of the charts, takes you to a larger Sharpchart of the ETF. They also have a very good series of advance/decline charts on their Market Breadth page.
The daily chart shows that JBLU broke out of a base formation, (line a), and has been in a strong uptrend since October. One of the features I like about their charts is they label the price of each swing high and low on the chart.
They also provide the values of the MAs that they use, or that you select. If you are a paid user, I believe you can also draw your own trend lines online and also get a greater depth of analysis, as well as, the ability to create your own pages of stocks.
The weekly chart includes the volume, as well as, the ratio of the stock, ETF, or mutual fund to the S&P 500 (SPX), along with its 20-week EMA on the bottom of the chart. This can help you determine whether the stock, ETF, or mutual fund is leading or lagging the S&P 500 (SPX).
The weekly chart shows a major breakout above the April 2012 high of $7.28, line a, as well as the move above the late October high of $7.69. This now becomes the first level of important support. The ratio, or RS chart, shows that it moved above its WMA in September (point c), and has now overcome the resistance that goes back to early 2012, line b.
I have found the most dynamic free charting site to be www.freestockcharts.com from the Worden Brothers. Their free site gives you lots of flexibility, in terms of indicators and analysis, as you can look at anything from a one-minute chart or a yearly chart on a delayed basis.
It uses Silverlight from Microsoft, which you will need to download, but in my experience, it is quite a secure process.
On their free platform, you can draw trend lines, run moving averages over indicators, and do Fibonacci, as well as, pivot point analysis. For a fee, you can upgrade to TC2000, which includes their proprietary volume studies, like the Time Segmented Volume, and involves a whole investor community.
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Allegiant Travel Company, LLC (ALGT) was another Regional Airlines stock that I noticed on the Finviz site. The chart shows an uptrend from the September lows, line b, which is now in the $102.50 area, which is also the quarterly pivot.
The chart shows major resistance in the $109.80-$110 area, line a. If this level is overcome, the trading range gives upside targets in the $128-$130 area. Using the pull down menu under Indicators (circled), I have added the OBV with its 21-period WMA. The chart shows important OBV resistance at line b, which is the key level to watch.
On the bottom, I have added their relative strength, which is very close to the relative performance that I regularly use in my analysis. The RS line turned up on Wednesday, but needs to move through the July-October highs, line d, to signal that ALGT is again a market-leading stock.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.