Scanning For Cash-Rich Stocksy by Donald W. Pendergast Jr.
You can scour the markets for stocks meeting specific fundamental and technical criteria, and here’s one way to do it.
TradeStation, as those who rely on it for their trading activity already know, has so many features that to explore and write about every one of them would probably take thousands of hours of research and compilation. In this article, we’ll look at one particular feature — the Scanner — to seek out stocks that meet a specific set of fundamental and/or technical criteria. Then we’ll take a look at the charts of the top-ranked stocks and see what kinds of trading opportunities may exist.
Let’s look at the scan in TradeStation (Figure 1); this standard scanning template looks for stocks with a strong cash position and a positive EPS — and that could be a great set of criteria for risk-averse investors and traders. You’ll note the fundamental criteria in the first screenshot; I won’t go into detail, as the list of “fundie” items included are self-explanatory. One change I made was that I upped the 10-day average daily volume figure from 100,000 to 500,000 and I lowered the close value to 5 (from 10). I also added a technical item at the very bottom, which tells the scan to only evaluate stocks that are outperforming the .SPX over the past four weeks, returning the top 25 stocks that meet the fundamental criteria.
Essentially, the scan, as modified, seeks cash-rich stocks with a positive earnings per share (EPS) that are also outperforming (high relative strength [RS]) the Standard & Poor’s 500 over the last 28 days. All that’s left to do is to include a list of stocks to scan. I chose the NYSE stocks list and tossed in the gold and silver stock list. See Figure 2.
The scan output appears a few moments after pressing the run button; I clicked on the “4 wk vs. SP 500” column header to bring the highest-ranked RS stocks to the top. BanCorpSouth (BXS) was ranked the top cash-rich stock that was also outperforming the .SPX over the past four weeks.
That’s good to know, but what is BXS’s daily chart telling us? To find out, simply right-click on the BXS ticker, click create and then chart analysis for BXS; a five-minute (default) chart appears and then you can format it, changing it to a daily (weekly, monthly, 60-minute, whatever you like) chart if you prefer.