MonthAugust 2020

Screening for Long Term Leaders

Based on a recent request, I created a MarketSmith screen to filter based on criteria that may be applicable to long term leaders.

Here’s my thought process on each of the criteria:

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Drawing a Channel in MarketSmith

A channel can be a helpful guide to visualize support and resistance. MarketSmith includes a comprehensive set of markup tools, with one of the options being a set of parallel lines (a.k.a. channel).

In the short video that follows, I’ll show you where to locate the markup tools as well as how to configure a channel on the Nasdaq composite.

It’s worthing noting, when you use a markup tool, anything you draw on screen will be saved. For example, if you markup a chart with a channel, when leave to view a different symbol, upon return, the channel will be restored. Pretty cool, huh?

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Making the Most of the RS Line in MarketSmith

I previously wrote an article about the RS Line: RS Line vs RS Rating – What’s the Difference? I explained the basics of the RS Line and the information it represents. What I didn’t cover are examples showing how to best put the RS Line to use – that’s where this post comes in.

As a quick review, the RS Line plots the performance of a stock versus the S&P 500. For example, if the S&P 500 is declining, and at the same time a stock is rising, that stock’s RS Line would trend up.

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It All Starts with Sales – Sales Acceleration Screen

In traditional CAN SLIM, strong earnings and sales are key. With that said, there are many excellent growth stocks that are good candidates for a watchlist, yet they have minimal or no earnings to date.

Many of my screens start with a similar set of criteria:

  • Price over $20
  • 20,000,000 in dollar volume
  • Composite Rating of 90+

I find this is a solid baseline, adjust as you like. With 20,000,000 in dollar volume, you are ensured there is adequate liquidity.

For this particular screen, notice the reference to sales acceleration for the last three quarters. For the most recent quarter sales, I’m looking for an increase of at least 25%.

FVRR is a good example of a stock from the result set that has strong sales growth, a monster move over the past few months, yet only one quarter of earnings posted.

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Merge Output from Multiple Screens into One List

If you run multiple screens in MarketSmith on a regular basis, you may find it helpful to combine the output into one list. An added benefit is that merging lists will also eliminate duplicates, saving you time.

The short video that follows shows how to merge the output from two of my custom screens.

Custom Screens From Mark Minervini’s Trend Templates

Last week on IBD’s Investing Podcast, Irusha Peiris interviewed Mark Minervini. As always, there was a lot great information to be had. One discussion that I found particularly intriguing was the integration of Mark’s trend templates into MarketSmith, more specifically, the option to create your own custom screens using the results of the trend template as the baseline set of stocks.

The short video that follows outlines the steps.

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Mike Webster’s What Would Webby (WWWD) Archive

Mike Webster is Portfolio Manager for a private fund. He previously worked with Investor’s Business Daily as the Head Market Strategist and prior to that was with O’Neil Capital Management as a SVP and Portfolio Manager.

While working with IBD, Mike started a What Would Webby Do series focused on day-by-day analysis of the Nasdaq Composite as well as the big picture view of the technical action throughout the week.

Mike’s articles are published here to make the content easier to navigate. Beginning on March 13th, 2020, the weekly updates moved to and became the Weekend Stock Market Update.


WWWD Charts – Charts I created to accompany Mike’s articles.

Webby MarketSmith Screens.

Quarterly EPS Shown as a Line Graph in thinkscript

One aspect I really appreciate of charting apps that offer custom coding capabilities is that you can present information visually that typically is not shown in that manner. For example with a few lines of thinkscript code you can plot a line graph of quarterly EPS in thinkorswim.

What follows is a screenshot of the line graph I wrote in less than 30 lines of code. The red and green dots represent the quarterly earnings, indicating if the current results were up/down from the previous report. I also appended at the bottom of the image the optional EPS bubble.

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