Setup alerts, triple moving average and Donchian crossover alerts, Bollinger Band squeeze alerts, breakout alerts, gap alerts, signals, surge alerts, and other watch list candidates. This scanner will, for example, generate an alert when stocks have had a Bollinger Band squeeze and a band penetration after the squeeze. Other sites may list stocks with a Bollinger Band penetration, but a band penetration without the preliminary squeeze is of little use. It is the squeeze that gives the band penetration meaning (see the explanation below). Our scan results are much more significant than what you find on other sites. For example, a gap in price without a surge in volume is not nearly as meaningful as a gap with a surge in volume our gap alerts occur when there is a gap with a surge in volume.

This page describes the use of alerts and signals in a disciplined strategy.

Alerts/Signals Are at 4 Other Locations on This Web Site.

(Check them out: different pages use different screens — R.C. Allen, Surges, etc.)

Use Directory to see what’s where on the site. Directory

Below, there is information about alerts and alert systems, Bollinger band squeezes and band penetrations, gaps with volume surges, Donchian signals, illustrations of stock setups, and information about our StockAlerts subscription. There is also a brief free sample list taken from the current list that subscribers get (updated daily), but you should read all of this page before reviewing those stocks so you will understand the alerts given. Go to the free list.

Top Portfolio Performance Requires A Good Alert System

In order to have a list of stocks available so you can quickly replace stocks that have just been sold, it is necessary to have a watch list. To create a watch list consisting of stocks that are about to surge you must focus on setups. Develop strategies, disciplines, and systems that will enable you to find setup situations quickly and regularly. You should have an alert system that will flash alerts for turnaround setups, alerts for price setups that signal a pending breakout, alerts on setups that signal a new trend, alerts for setups that indicate a stock is likely to break down soon, and alerts when moving average setups occur (as when they signal momentum alignments that suggest the beginning of a new trend). The R.C. Allen triple moving average crossover system and its variants are such systems.

You should have a heavy-duty real strength screener (see Strongest Stocks and The Valuator ), not just the RSI.

Use An Alert System To Build Your Watch List

The most successful traders and investors do not want to wait 6 months to find out whether a stock will perform. They plan their purchases so that they will know within a few weeks if their decision to buy was right or wrong. They do this by monitoring a variety of alert screens. An alert screen tells you that a specific setup has occurred that usually culminates in a significant move. Once the conditions of the alert have been satisfied, the trader puts a stock on his watch list. He then waits for the alert to become validated by the commencement of the move or a trigger event.

An example of a validated alert would be if a stock is placed on the watch list because an alert signaled that the stock has declined to its rapidly rising 50-day moving average. As the stock nears its rising 50-day moving average, you would put it on your watch list. The confirmation occurs if the stock reverses its downward direction after touching its rising 50-day moving average (institutional investors tend to be buyers at such times). The alert announces Here is one to watch! The trigger event says it’s time to act! The trader uses alerts because time is money. To achieve maximum returns on his money, the trader attempts to keep his portfolio fully invested in profitable positions. Any time a portfolio has a non-performing position, that portion of the portfolio exerts a drag on the result of all the positive work being done by the performing positions. Why buy a stock just because it has a good story and then wait for 6 months for it to make any progress, when a simple alert system can really direct you to stocks that are about to move now. By using alerts to create watch lists, you can dramatically cut your wait time for performance. Traders at Stock Disciplines generally wait no more than 2 weeks for the expected move. If it doesn’t occur, they know that the setup failed, and that it is time to look elsewhere. They have to have a very good reason to keep holding.

Let’s assume a trader (or investor) likes to maintain 10 positions in his portfolio. Each position is a slot or basket. Every time a stock is purchased, a slot or basket is filled. If any basket has no position in it, that basket is non-performing. If our trader averages 7 positions over the year, then 3 empty baskets have dragged down the performance of the other 7. Instead of averaging 40% for the year (assuming each position gained 40%), the portfolio will gain only 28% (assuming little or no interest for the empty slots). If the trader has an alert system that tracks several thousand stocks while monitoring a variety of alert setup conditions, then when the portfolio sells a position, it won’t take long for the alert system to find another setup. The alert system also increases the odds that the trader will not have to wait long for the new stock to perform. The alert system can notify the trader if either a buy or a sell setup is emerging. If the trader has sold a position but the alert system cannot find a replacement buy candidate among several thousand stocks while using a variety of alert strategies, then the market is probably not trending but simply moving sideways or declining. An alert system therefore has a built-in discipline that keeps the trader from filling empty portfolio slots with non-performing stocks. If the alert system cannot find any stocks that are setting up for a significant move, then why buy anything?

Why do traders at Stock Disciplines consider StockAlerts scans to be superior to scans found on most Web sites? To begin with, StockAlerts is based on a pre-screened stock universe. That screening eliminated many (but not all) junk stocks. In addition, search algorithms are more complex, requiring more complete or better setups. For example, some Web sites might find stocks that have penetrated a Bollinger band but StockAlerts finds stocks that penetrate a Bollinger band AFTER a Bollinger band squeeze (a period of low volatility). That factor alone makes a very big difference in the quality of the signal. Let’s say you are looking for stocks that satisfy the 4-week rule originated by Richard Donchian. Some scanners will find stocks that close above their highest price for the last 20 days. That means any stock making new highs can satisfy the filter. Is that what you really want from the filter? That’s possible, but there is something better. What you really want are stocks that have broken out of a 4-week consolidation pattern. The sideways pattern is important because it represents consolidation. That is, the old shareholders are nervous about the stock and are bailing out while new shareholders that are believers in the stock are replacing them. You want stocks that have been going sideways but that are now resuming their upward climb. Our Bollinger Band Squeeze alert delivers that. A squeeze results when a stock goes essentially sideways (during this consolidation time volatility is usually low because there is a relative balance between buyers and sellers). Our alert system is designed to signal an upper band penetration only AFTER a squeeze. This also satisfies the purpose of Donchian’s channel breakout rule. We know of no other stock filter that can do that. Our algorithm does not specify that the stock has to consolidate for exactly 4-weeks. However, it does require some consolidation or a quiet period before the breakout. That filters out far more stocks than simply aksing for stocks that are making new highs.

StockAlerts is one of the tools that our company members use to find stocks that are about to move. It tracks over 8,000 stocks with a variety of alert systems. We create lists of stocks that have triggered any of six important alert systems. We believe the lists provided are worth far more than the price of a subscription.

The lists are available in the password-protected Subscribers section of this site. We believe this can be an extremely valuable resource for those who want to maintain a watch list that is regularly updated with a fresh supply of stocks that appear to be getting ready for action soon. What follows is a description of StockAlerts.

How could an alert be configured? Suppose that a stock has been in a trading range for 6 months, ranging between $22 and $27. What we are looking for is an alert system that will notify us when conditions suggest the probable penetration of the $27 barrier. Assume that our scanning computer has already identified the stock as being in a trading range. What are some of the other conditions that we might require before an alert is generated? We might want the stock to have diminishing volume when its price has been in decline and increasing volume when the stock has been rising. We may want the stock to achieve a new 4-week high or give some other sign that it is breaking out of its trading range. If we do, then we also want the volume to pick up dramatically as the stock penetrates the upper boundary of its trading range. We want the alert to say watch this one, it may be about to break through the overhead resistance or check this one out, it has just broken through the overhead resistance. The alert should not say, buy this! Alerts are not buy or sell signals. After getting an alert, the trader might then wait to see what happens next. Does the stock immediately collapse back into its trading range? Does the upper boundary of its trading range ($27 in the example above) act as support after the breakout? The point is that the alert merely prompts the trader to place the stock on the watch list so that a quick response can be made if the trigger event occurs (if the stock succeeds in pushing through the resistance at $27, tests support there, and then begins to climb). Just because the stock breaks through the resistance at $27, there is no guarantee that the stock will keep rising. For some traders, though, the breakout is enough. For them, early entry is worth the risk of a breakout failure. That is, the breakout may be a fake-out. That’s why some traders require the satisfaction of additional conditions. The alert might also be designed to stay mute until the stock has remained above the resistance a certain number of days. Even so, the alert cannot guarantee a good result. However, waiting for the alert does increase the probability that the trade will have a successful outcome. A well-designed alert system also minimizes the down time for the slots in a portfolio when they become vacant.

All the stocks in the StockAlerts database are regularly scanned to determine if certain strategy setups have occurred. A setup is a stock pattern of price and/or volume behavior that is often precedes a significant upward or downward move (with a relatively high level of reliability). If our scanning system thinks a stock may be completing one of these patterns, it will generate an alert and identify the suspected pattern. The StockAlerts output makes it much easier to find the stocks that disciplined strategies covet.

Once again, empty slots in a portfolio lessen the impact on the portfolio of the gains achieved by the other positions. Therefore, high performance systems and disciplines tend to keep all slots full—and making money. The level of performance achieved by your strategies by the end of the year will be determined by the percentage of time the portfolio is fully invested in accordance with your high-performance strategies. The most effective traders develop systems that keep their strategies invested by quickly filling empty slots with rising stocks (or declining stocks for short-sellers). To this end, many successful traders maintain a watch list of up to about 300 stocks that they constantly scan to see if any are ready for inclusion in the portfolio.

StockAlerts is intended to be a helpful tool in the development of the watch list. It scans for stocks that have completed or nearly completed an attractive setup. Thus, the stocks highlighted tend to be more timely than those of most lists. An alert-generating stock will soon follow through with a signal or it will not. Either way, it sould not take long to learn if the money is well-placed. This much shorter wait time is extremely important, because the saying time is money is particularly true for traders. Without this advantage, a person might be involved with a stock for months without a clear indication about its intentions. A regular review of the stocks that generate alerts in StockAlerts should be a very useful discipline for traders in their efforts to maintain a list of stocks that are ready for action at any given time. Keeping and maintaining a good watch list is one of the more important stock trading disciplines.

The signals generated in StockAlerts are not recommendations to buy or sell. We simply report the output of various search algorithms. The reader will have to evaluate the signals generated with regard to their context (overall chart pattern, news related to the company, etc.). Even if a scan indicates that an alert has just been triggered, a careful analysis of the chart may reveal significant resistance just above the current price. Therefore, caution is in order. Never act on an alert without evaluating its context. The alert system cannot detect the difference between a great setup and something that looks good but is actually a dangerous booby trap. If you decide the stock is not a booby trap and that there is no strong resistance that must be overcome, then it can be considered for inclusion in a watch list and monitored to see if an appropriate follow-through buy signal occurs. Our system currently generates the information and alerts listed in the following EXPLANATIONS section. Only the UP alerts are defined below, but our scanning system generates both UP and DN alerts. The DN alert indicates the existence of conditions opposite to those that cause an UP alert.

A short table listing a few of the stocks on the current subscriber list is near the bottom of this page, but you should read everything between here and there so you will know what you are seeing. The following table resembles the reports subscribers get with a StockAlerts subscription. The alerts shown below in the left column are fictitious and should not be construed as related to the other data shown or to current stock patterns. Some names are also fictitious and some symbols are real but not for the indicated stock. Charts are not included with our alerts. Below the following table, there is a description of the alerts you might get and charts to demonstrate what those alerts might look like. Those charts do not represent stocks listed in the following table. Subscribers get tables resembling (in general layout) the following table, but it will be up to subscribers to enter the symbols in a charting program or Web site and evaluate whether or not the stocks should be bought, sold, included in a watch list, or ignored.

These reports are updated daily

The Minimum Volume Surge Required for This Scanner’s List Was Equal to 0