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Finding the Next Great Stock to Trade

03/19/14 04:27:14 PM
by Matt Blackman

One sign of a healthy stock market is the appearance of a number of up-and-coming stocks with a relatively low number of shares and market caps that are making new all-time highs. It's also a great way of finding the next big stocks to add to your trading portfolio.

Security:   RGDO
Position:   N/A

Healthy rallies are generally led by a few very strong stocks, many of which are relatively young companies with a low number of shares in the float and lower market capitalizations. When these stocks are making new all-time highs, they tend to pull the market higher with them.

In this article we look for stocks making new highs with minimum daily volumes of 100,000 shares, price greater than $5 per share, market capitalizations of less than $100 billion and share floats of less than 500 million. On March 18, this search turned up 160 US stocks. But one factor we also look for is relatively low ownership by institutions which often means they have not hit the radar of large players yet. By adding the requirement that institutions own less than 20%, our list was reduced to just 14 stocks.

Figure 1 Results of our New Fliers scan showing the 14 stocks that showed up.
Graphic provided by:
As we see from the table in Figure 1, we found 14 stocks of interest and upon examination of their stock charts, found that many of them were either in strong uptrends or were in the process of posting compelling chart patterns. Regado Biosciences (RGDO) was at the top of our list (Figure 2).

Figure 2 New high flier Regado Biosciences showing an interesting Cup & Handle chart pattern with handle forming on right side followed by top handle channel breakout and big gap.
Graphic provided by:
Regado Biosciences is a relative new comer to the NASDAQ and it recently completed a powerful Cup & Handle chart pattern before gapping to new highs after a six month consolidation.

Not only will this search help you find new potential trade candidates, it will give you a quick check of market strength. When you get ten or more in your scan, it usually means the rally is strong and it's a good time to take a risk-on position.

Matt Blackman

Matt Blackman is a full-time technical and financial writer and trader. He produces corporate and financial newsletters, and assists clients in getting published in the mainstream media. He is the host of Matt has earned the Chartered Market Technician (CMT) designation. Find out what stocks and futures Matt is watching on Twitter at

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