If you're on the hunt for stocks that are in an uptrend, have higher trading volume, but are currently in a sideways pattern, you've come to the right place. In this blog post, I'll guide you through setting up a stock screener in Tradingview to find these golden opportunities.
Criteria: 20 SMA > 50 SMA and 50 SMA > 200 SMA
In this chart, you can see:
Volume (Average Volume (50) > 1M): Filtering for stocks with an average volume greater than 1 million ensures liquidity and confirms the validity of price movements.
RSI (50 < RSI (14) < 70): The RSI helps filter out stocks that are not in extreme conditions (overbought/oversold). A stock in this range is likely consolidating or moving sideways.
Bollinger Bands (Close price within Bollinger Bands (20, 2)): Bollinger Bands provide a visual representation of a stock's volatility. If the stock price stays within the bands, it often indicates a consolidation phase.
By combining these criteria, you can effectively filter stocks that are in a general uptrend with significant trading volume but currently experiencing a period of sideways movement. This setup can help you find potential opportunities where the stock might be preparing for the next move up.
Step-by-Step Guide
1. Open Tradingview Screener
First things first, log in to Tradingview and navigate to bottom right of the page. Click on "Screeners" icon to get started.2. Set the Criteria
A. Identifying Uptrend Stocks
Moving Averages: To spot stocks in an uptrend, we’ll use multiple moving averages. Specifically, we'll look for the 20-day simple moving average (SMA) being above the 50-day SMA and the 50-day SMA being above the 200-day SMA.Criteria: 20 SMA > 50 SMA and 50 SMA > 200 SMA
Why: These criteria confirm both short-term and long-term uptrends, ensuring the stock has been consistently moving upwards.
B. Filtering for Higher Volume
Volume Filter: Next, we want to ensure that the stock has a significant average trading volume, indicating strong interest and activity.Criteria: Average Volume (50) > 1M
Why: Higher average volume ensures liquidity and confirms the validity of price movements.
C. Finding Stocks Currently Moving Sideways
Relative Strength Index (RSI):To find stocks in a sideways pattern, we'll use the RSI to filter out those that are not currently overbought or oversold.
Criteria: RSI (14) between 50 and 70
Why: This range suggests the stock is neither overbought nor oversold, indicating a potential sideways movement.
Bollinger Bands:
Bollinger Bands can help identify sideways movement by showing if a stock is staying within a typical range.
Criteria: Close price within Bollinger Bands (20, 2)
Why: If the stock price stays within the bands, it often indicates a consolidation phase.
Criteria: Price Range (e.g., 0.2 - 1)
Optional: Price Range
If you want to focus on stocks within a specific price range, you can add this as an optional criterion.Criteria: Price Range (e.g., 0.2 - 1)
Why: This allows you to target stocks within your preferred investment range.
Example Screener Setup
Here’s a quick summary of the filters you’ll want to apply in Tradingview:Uptrend Indicators:
- 20 SMA > 50 SMA
- 50 SMA > 200 SMA
Volume:
- Average Volume (50) > 1M
Sideways Movement:
- RSI (14) between 50 and 70
- Close price within Bollinger Bands (20, 2)
Optional:
- Price range (e.g., above 0.2)
Example Chart
To illustrate these criteria, let’s look at an example using the mentioned indicators:
In this chart, you can see:
Uptrend: The 20 SMA is above the 50 SMA, and the 50 SMA is above the 200 SMA, confirming a strong uptrend.
Higher Volume: The average volume over the last 50 days is above 1 million.
Higher Volume: The average volume over the last 50 days is above 1 million.
Sideways Movement: The RSI is between 50 and 70, and the stock price is moving within the Bollinger Bands, indicating a consolidation phase.
Explanation of Criteria
Moving Averages (20 SMA > 50 SMA and 50 SMA > 200 SMA): Using these moving averages confirms a strong and sustained uptrend over different time periods, ensuring that the stock has been consistently moving upwards.Volume (Average Volume (50) > 1M): Filtering for stocks with an average volume greater than 1 million ensures liquidity and confirms the validity of price movements.
RSI (50 < RSI (14) < 70): The RSI helps filter out stocks that are not in extreme conditions (overbought/oversold). A stock in this range is likely consolidating or moving sideways.
Bollinger Bands (Close price within Bollinger Bands (20, 2)): Bollinger Bands provide a visual representation of a stock's volatility. If the stock price stays within the bands, it often indicates a consolidation phase.
By combining these criteria, you can effectively filter stocks that are in a general uptrend with significant trading volume but currently experiencing a period of sideways movement. This setup can help you find potential opportunities where the stock might be preparing for the next move up.
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