Stocks -A Winning Way To Scan For Stocks That Are In Uptrends
Below is a MRR and PLR article in category Finance -> subcategory Stock Market.
How to Identify Winning Stocks in Uptrends
Summary:
To spot stocks that are experiencing price breakouts, it's crucial to scan and filter them using specific indicators. One effective tool is the On Balance Volume (OBV). But how can you determine the potential strength of a stock’s move? Is the breakout significant enough for a profitable short-term trade? This article explores how successful traders go beyond simple OBV scans.
Keywords:
OBV, On Balance Volume, stock scanning, upward momentum, Joe Granville, cumulative volume, charting
Article:
With thousands of stocks available on the market, how can a trader efficiently choose the right ones? While fundamental analysis is an option, assessing a company’s earnings, balance sheets, and dividends, many successful traders prefer technical analysis.
Using technical analysis, traders employ charting and indicators to identify stocks on the move. Professional traders often rely on an array of tools, and one popular choice is the On Balance Volume (OBV) indicator.
Introduced by Joseph Granville, OBV tracks cumulative volume with the principle that volume should support price movement. This indicator helps traders spot discrepancies where OBV increases but the price hasn’t yet followed, indicating a potential price surge.
But how significant will this move be? Traders must ensure that the anticipated jump is substantial enough to offer a good profit margin after accounting for brokerage and commissions.
Additionally, traders combine OBV signals with insights from Elliott Wave Theory, which identifies the 3rd and 5th waves as the most impulsive and robust. Traders have seen considerable success by spotting stocks with an OBV breakout that are also in these strong waves.
In essence, when a stock exhibits an OBV surge and aligns with its 3rd or 5th wave, it becomes a prime candidate for rapid price movement, offering the potential for handsome profits in a short time frame.
You can find the original non-AI version of this article here: Stocks -A Winning Way To Scan For Stocks That Are In Uptrends.
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