November's Strong Stocks Getting Stronger

11/15/2013 7:00 am EST

Focus: STRATEGIES

Corey Rosenbloom

Founder and President, Afraid to Trade

I’m a big fan of the concept of scanning for strong stocks getting stronger, along with the concept of relative strength, says Corey Rosenbloom of AfraidToTrade.com.

Stocks that are trading in an established trend, especially within a structured rising parallel trendline pattern, can provide quick and easy retracement opportunities for swing and even intraday traders.

Let’s take a quick look at nine top stocks in strong uptrends in the S&P 500:

chart
(Chart courtesy of Stockcharts.com)
Click to Enlarge

Using the FinViz screener tool (one of my favorites), I visually scanned for strong trending stocks in the S&P 500.

I hand-selected these nine names as interesting candidates from which to do additional analysis for potential trading opportunities.

It can be helpful to scan visually (seeing multiple charts on the same page at once) for anything that jumps off the chart or catches your eye.

Here is an example of three of these charts, which can be the foundation for additional analysis:

Washington Post (WPO):

chart
(Chart courtesy of Stockcharts.com)
Click to Enlarge

Ameriprise Financial (AMP):

chart
(Chart courtesy of Stockcharts.com)
Click to Enlarge

Priceline (PCLN) note the break and hold above $1,000 per share:

chart
(Chart courtesy of Stockcharts.com)
Click to Enlarge

In general, stocks in strong trends (showing strong relative strength) actually tend to get stronger over time as opposed to weaker. I know it’s tempting to seek tops (reversals) but often simple pro-trending retracement strategies work better than trying to find the elusive top.

In fact, stocks in strong uptrends are propelled higher in part by short-sellers buying back to cover (exit/stop-loss) losing positions.

This is particularly true with breakouts above round numbers such as $1,000 in Priceline and Google.

By Corey Rosenbloom, CMT, Trader and Blogger, AfraidToTrade.com

Related Articles on STRATEGIES