Using Oz Scans

I have read a thread on elite in which Tony Oz said he is having a good year. Well I need to start having a good year. Consequently I am starting this thread in part to impart discipline upon myself and attempt to become a longer term trader. I feel by posting my trades here (Oz scanner trades) I will be more likely to hold them for a period of time longer than my usual trade time of 30 seconds to two minutes.

My plan is to make 3-4 trades off the oz scans per day. And report my success or lack thereof right on this thread. This way I hope we can get an informative thread going and I can also evaluate my ability to follow my trade plan. I am sure this concept will be adjusted with time.

I appreciate all criticism and information. I have found that I occasionally get defensive and can write some pretty caustic responses. I will endeavor to accept criticism without defensive responses. If I am baited and respond with something offensive I request that the moderate members of this board demand that I send 10 to 20 dollars to the charity of my choice.

My first question is the following. Based on the fact we are fairly near the low of the range in the NDX what type of Oz trades would you be looking at tomorrow. My thought is that if we are holding support by say 10:15 NYSE time I should look to some bottom fisher or usual suspects. However, what would you look to on a down day?

 

Wow! Great idea. I would love to participate in this thread. However, I will be moving both office and home over the next two weeks and will be in Vegas for the Money Show.

After 5/13/02, I should be able to contribute more.

Anyhow, here are a few tricks for users of the Oz Scanner.

If you are looking for a bounce in the market when oversold conditions are present and the Vix is high, the best scan is ... KNOCK DOWN!

What I try to do is use the reversal-day trading strategy (page 142). I fine tune entries based on patterns such as double bottom, reverse head and shoulders etc. Chapter 7 and parts of chapter 6 explains the entry strategy in more detail. So I buy a stock that is down today based on intraday support levels. Stops are tight.

Now, if we get a good bounce in large cap stocks with a reversal day, the following day, I will focus on:

Bottom Fisher
Usual Suspects
Power Trader
New Kid on the Block

Again, I look for the first day of the move.

 

The best one I have caught so far was PHSY on 4/15. I like the New Kids scans a lot. The stocks tend to be very thin, but when they move..THEY MOVE. We've really been in a market of stocks, not a stock market..so you can always find a few things.

Brandon

 

The following is some Q&A from past email I received from an ET member. I'd like to share it with you as you may find it beneficial.

"I have a few brief questions as a subscriber to your scans.

Are the scans mostly intended to:

1. Trade that day
2. Most of the scans have certain criteria to be maintained, i.e...stay above the open price.
3.As I watch the scans some stay and some go away...don't maintain criteria.
4.I am guessing that for most entries (not all) but most that you are better off:
a)waiting for a good pull back...support....does not break open price
b)waiting until the afternoon.
5. If you do decide to enter the stock early...what sets it apart from the
rest?

I will try to answer your questions. If a stock shows up and you like the daily chart then you MIGHT have a potential trade.

"1. Trade that day"

You may also want to keep an eye on the stock if you like the daily chart for a while as a setup might present itself later on.

"2. Most of the scans have certain criteria to be maintained, i.e...stay above the open price."

True, a stock will fall out if criteria is not met, but the criteria is only used to initiate an alert. After that, the setup itself must be taken into consideration and a pull-back can be bought in which the stock does not meet screening criteria anymore. Many times, I actually enter after a stock is not showing up on the scanner anymore. So I use the scanner to find stocks and then trade the setups of the individual stock.

"3.As I watch the scans some stay and some go away...don't maintain criteria."

See above

"4.I am guessing that for most entries (not all) but most that you are better off:
a)waiting for a good pull back...support....does not break open price
b)waiting until the afternoon."

I prefer to enter where the highest reward/risk ratio is presented to me. But sometime I pay up for partial positions to be in the stock and may add on a pullback.

"5. If you do decide to enter the stock early...what sets it apart from the rest?"

She has to have "sexy legs"

1. A good overall reward to risk ratio with overall market support on extreme overbought or oversold conditions and a likely reversal (doesn't happen too often).

2. New Kid on the block setup in December or January or a great first day move. I will buy some and look to add on pullback which I may never get.

3. Power Trader in bull markets. Again partial position.

4. Sky scraper - Extreme overbought bounce in market and hitting major MA or BB resistance. Check out BRCM at 44.99 high on 3/11/02. Took a short at 43.64 on Friday. Added more at 43.24 on Monday and hung on for my dear life as the stock went up to 44.99 later that day. Stop at 45.25 was almost hit, but I survived

5. Bottom Fisher - same as number 4.


In conclusion, use the scanner to find a GREAT daily chart. Then trade it in the best way you know how. If you like the setup, don't worry about the stock falling out of the scanner. what you have to do is determine entry and exit points and stick to it."

I hope this helps,

Tony

 

I couldn't agree more. This market is perfect for intraday scanning. When I said at a conference in Chicago last year that I think the New Kid on the Block and Power Trader Scans will be my most important trading tools over the next few years, I definitely meant it. And, I still feel this way.

 

Just in case you didn't have this one on the list: Marthanyc Charity...you may send your *$20* donation via paypal.com. My edress is: marthanyc@paypal.com. You can be a hot tamale, at times, and as a result....I will have a good year (a la Oz).




P.S. I think this thread is GREAT idea!!!! Thanks for posting your entries for the world to see, jem. Would you also be adding your net losses/gaines, number of shares, etc... (a la Hitman)?

 

I will post my entries- exists, reasons and hopefully the plan that I had when I made the trade. Sure I will probably sum up the P$L. But I think I will leave my comissions out of it as I am not planning to turn this into a my firm is better than yours kind of thing.

Now, did you catch the info from Tony. I take it from what he said that if we get into a nice oversold situation (vix might not be high tommorow though) one could pick off oversold stocks from the knock down scan. I guess I will look for knock downs into my favorite moving averages if conditions are right. I never thought of that. However, I will have to pay close attention to volume. Man this position trading thing takes as much work as scalping huh.

 

Watched this pig all day in pain. I was looking to buy a pullback from the morning high to 21.55. Stock didn't want to give me 21.55 and 21.65 was as low as it went, but I couldn't have had it for less than 21.68-21.72.

And then she took off .... see the attached chart.

The reason I liked the setup was that the stock pulled back from 22.70 to 21 which was the top of the previous channel and the 20 day MA. This after breaking out from the channel where the BB were tight on 4/10/02

The other reason I wanted it at 21.55 is that 22.70 was the resistance level, so if I was to get that price target, I would have made 1.15. I was going to keep a 0.35 stop.

Anyhow, I'm done for the day time to pack more boxes...

Tony

PS: Check out the pigs on the gapper Scan today. We have EXPE, CKFR, PECS and WBSN.