Sunday, May 01, 2011

Reverse Engineering using Stocktwits 50 and Finviz

Almost all our trading alerts are found manually as we go through our master list every day.     However if you don’t have a master list or are new to the game, here are some alternative methods to finding alerts and to building your own master list.

Start with stocks that know how to move.   A good starting place is just to look through the   Stocktwits 50 list.

Now do two things:  1) look for themes and then when you find something you really like, 2) do reverse engineering.

Look through the sectors of these momentum move type stocks.  Is there one sector that keeps popping up? Or is there one stock which is moving really well?

There are a few sectors that keep coming up, and one of them is Oil and Gas Equipment & Services.    The second stock mentioned, RES, belongs to this category. Now go to and plug in RES on the right hand corner:

RES chart pops up and below it you’ll find a  link to all the stocks in the same sector:

Sub sector of Oil and Gas that RES belongs to comes up.   Now from here comes the manual work.   A good start would be to filter out anything under $20 and trading under 1 MM volume.
We don’t often use this strategy because we like trading stocks that we know well (currently around 230 stocks).  However, if you’re new to the game and you want to build up a list, this a great way to go using two great free resources available to everyone.

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