How my “oversold stochastic followed by a buy signal” scan found PCLN


I have been talking about the scan that I use to detect stocks with an oversold stochastic that then go on to produce a buy signal.   While I did not buy PCLN when I saw this signal because of the low GMI   reading, I did notice PCLN when my scan detected it weeks ago.   This is of some note, because PCLN exploded after hours on Tuesday when it released its blow-out earnings.   The chart below shows why my scan detected PCLN (click on chart to enlarge).   Within a few days after its stochastic declined to oversold levels, below 20, PCLN closed above its 30 day average, indicating a buy signal for me.   You can see for yourself what happened next.   This scan does not typically work so well in a down market, but I have found that in an up-trending market it can work quite well.   In the coming days I will list some stocks that are picked up by my scan. Just remember, no technique is perfect and one must always use stops to minimize losses.

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