February Scan for Top Five Most Extended Stocks from 200 day SMA

Feb 10, 2016: 12:20 PM CST

Which five stocks are most over-extended above AND beneath their 200 day Simple Moving Average?

Let’s highlight these candidates on our monthly stock scan.

We’ll start with the stocks most over-extended to the upside (given the 2016 downtrend):

Let’s take a moment to define what we’re seeing.

This is a simple stock scan (from FinViz.com) that shows the percentage a stock is trading above its 200 day Simple Moving Average (SMA).

The most “overextended” stock in the S&P 500 right now is Tyson Foods (TSN) which is 35% higher than its 200 day SMA.

Here’s Tyson’s chart highlighting what we’re seeing on the scan:

There’s two ways to use a scan like this:

1.  To find “Relative Strength Leadership” for trading retracements into a strongly trending stock

2.  To play short-term “Fades” or “Mean Reversion” Strategies

I personally prefer to identify strength and trade retracements into strong stocks but you can use this scan either way.

Other leaders include Computer Science Corp (CSC), Airgas (ARG), Mattel (MAT), and Green Mountain (GMCR).

The following five stocks are most extended “Down Away From” its 200 day SMA:

Chesapeake Energy (CHK), Williams Companies (WMB), Marathon Oil (MRO), Freeport-McMoRan (FCX) and Devon Energy (DVN).

Notice that each of the five “Relative Weakness” stocks are in the Basic Materials Sector.

Notice also that Chesapeake is 77% BELOW its 200 day SMA as seen below (ouch):

Simple Scans like this can often turn up candidates (stocks) that you might miss on complex scans.

Whether you like to “fade” (play counter-trend reactions) or trade with a trend, this scan can help you.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

2 Comments

2 Responses to “February Scan for Top Five Most Extended Stocks from 200 day SMA”

  1. Russel Says:

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