Active Trading Strategies | Pat Mullaly | 1-12-21 | RSI, Relative Strength and Bollinger Squeeze
well the market is pulling back a little bit today last couple of days maybe that's to be expected we're going to look for some possibilities some changes a little bit of standard deviation looks to see what's moving and then look at some relative strength along with that to see if we can make better decisions stick around [Music] good afternoon good morning good evening depending on where you are in the globe and uh things uh things are changing a little bit there's been a little bit of trade news i believe out the this morning that's moving some of the commodities uh that's neither here nor there with what we're going to talk about what we're going to talk about today is putting together a scan looking at some things that have started to come off of center and are starting to expand in value let's take a look at those before we do any of that let's uh make sure that we get into our important information and that is everything we're doing here for educational purposes only not for recommendations trades that involve or excuse me yeah we're going to actually look at actual trade actual symbols that does not mean that those trades that we're demonstrating here that doesn't mean td ameritrade is making any kind of determination about their suitability any investment decision you make in your self-directed account solely your responsibility past performance mini security does not guarantee future returns any stop loss will not guarantee an execution at or near the that that particular price all investing involves risk including the risk of loss there is zero commissions those apply to online u.s exchanges the stocks etfs and option trades option trades although have a 65 options contract fee um please remember that so we look at some standard deviation by way of the bollinger bands we're going to go back and and pick up on something we were doing several weeks ago bollinger bands uh relative strength though this time uh we're going to build a we're going to look at some price action some volume we're going to build a scan so we don't have to have so many indicators sitting on our sitting on our screen our charts excuse me let's uh get in there and uh first and foremost let's say hello to everybody out there we have barb in the chat room manning the questions here john hello rich henry frank yoko uh leila mike monica aldo david ricardo scott fred everybody on the everybody that is on the archives or the recordings column archives uh the recordings welcome welcome welcome please don't hesitate to join us live if you can um that way you get to see the chats of these great people in there so uh let's take a look at what's going on out there first and foremost we've got the s p 500 down four tenths of a percent we can see it's drifting lower uh down from its uh supply line or its upper channel line resistance line resistance upper channel supply whatever you want to call it and we look for price to come back in there we look for that to be indications of strength and or weakness so right now we're sitting right at the middle of the channel for those that are curious how i do that channel i'm going to show this once again we're going to come down here to the drawing set down here or you can come up here to the drawing set and come to the drawing tools and grab the channel line and then draw your channel and the reason i'm showing this is that a lot of people have asked how do you get the center line that center dash line you're going to right click on the channel and then you're going to come in and edit the properties and come down here and check or uncheck that you can put in a 25 and a 75 as well if you wish and that's how that gets there why is that important it's important because halfway marks give us some some important information something that can't make it through the halfway mark is more of a caution flag something that holds breaks above the halfway mark and holds above it is a is something that tells us maybe this is some strength coming in so a sign of strength process possibly coming in here as well so there you go the s p 500 pulling back we've got uh uh down uh four tenths of a percent but we're showing um an inordinate amount of up volume at this time of day for us for an end index for the s p 500 index to be down and another thing we can pop in here if you want is the nya which is the nasdaq composite which is where the the volume comes from and we can see that it is down fractional or it's actually up fractionally now so the nasdaq the total nasdaq's holding up uh and that's why we're seeing the up volume and that's important because a good portion of the what's in the s p 500 comes from the new york stock exchange not the nasdaq the new york stock exchange uh volume so ndx let's see what ndx is doing because some of those were getting beat down pretty good they're down about six tenths of a percent all in all if we use the s p 500 as a benchmark um then uh we we're showing uh still showing up trend you know this is that cadence remember it's that cadence that price moves in and out of right and so there's just fluctuation back and forth as we watch price so what do we do here and why do we look at this so often and there's that midpoint right in here you can see that midpoint became an issue at one point not too long ago and that may help us make some decisions on whether or not we need to start to hedge but in here you can see the midpoint became uh a uh ceiling and finally we broke above that four days ago so some strength coming in uh and uh in the early part of this week and weakness coming in excuse me strength coming in the last part of last week weakness coming in the early part of this week but we're showing some good up volume on the new york stock exchange all right we look over here and again the russell 2000 small cap still strong as well as the others not really peeling off too terribly much again uh today's strength in sectors is the energy sector and uh discretionary and uh financial and materials and uh and the industrials we're not seeing those tech stocks uh hold up very well and that's probably why we have the nasdaq down the way we do okay let's get on to our discussion for today now that we have it's good to look at the market have a checkup uh on what's going on out there but that doesn't mean you can't trade individual stocks you can't trade you you can trade bullishly in a bearish market we're not in a bearish market we're in a bullish market if you're in a bullish market that's the whole idea of the rising tide lifts all boats as long as you're in the proper uh the proper uh industry groups the proper uh companies uh out there that might give you a little bit more leeway and so what we're gonna do today is i'm gonna pop over here and we're going to uh look at um a strategy well i don't call it a strategy whatever you want we're going to look at a couple of things here and in the top frame i have bollinger bands we get the bollinger bands everything we're going to do here if you are new to this this is what bollinger bands are uh is the outside the the middle band is a 20 uh period moving average the outside bands are two standard deviations away from that moving average a move in into that area or above that area it might be an indication of some strength so we're going to use bollinger bands and we're also going to use the bandwidth this is just telling us that when it's down in this dotted line down in here that it is the volatility is as low as it's been over the last 150 days now we've looked at this before we've used this before and we want to consider consider using this again as a matter of fact let's see here trying to remember which you think it was check no it wasn't checked but in any event um what we want to do is define a few things before we go diving in how's the market well we looked at the market we know the market's pulling back we know there's some rotation in the market away from the big tech stocks that we watched grow and grow and grow over the last uh you know nine months of last year we're also going to look at relative strength and this is just a comparison of uber this happens to be uber technologies you can see over the last year it didn't do all that grand up until october november started to move again but it's outperforming the s p 500 so really just taking uber the price of uber and dividing it by the price of spx and if it's outperforming the uh the major market then uh that is oftentimes will give you maybe a little bit of power into your into your uh idea a little bit lower risk idea perhaps and if it's breaking above if we have this starting to pull back to the upside after a low consolidation period now this isn't the only thing we're going to look at we're going to look at price 2. we're going to look at that here in a second and then we're going to look at a scan we're going to look for price to pop up above and into that upper band what i want you to notice though we're not just going to ignore price you can do a lot of things without a lot of indicators if you understand how price moves if you want to look for things that you haven't action that you haven't seen in a while such as this action here where price jumped up into that upper band and we saw relative strength picking up then we look for price to continue in that direction for a short-term trade let's pop over to the next chart because the next chart is price and volume so what are we seeing how do we tell you know what is there any sneakiness going on out there so if i were to draw a line across these highs right here we would see a penetration of that high three days ago fall back yesterday started to pull back up into that line today we're moving to the upside we're also getting strength and volume off of off of this uh these lows over in here so volume starting to pick up as price started to move higher and uh we're not really seeing we're seeing more we're seeing more consecutive days we're not seeing a ton of volume coming back in but we uh as far as aggregation but we are seeing the volume starting to pick up so even some of this red volume that we're seeing here remember there's a buyer and a seller anytime somebody sells a stock somebody's buying it that could be a little bit of accumulation in there as well so the decision needs to be made should you buy uber and how do we find these now over here i have a list of stocks that i pulled up this morning that's where i got uh these uh i think the majority of all of these stocks uh this morning and how do we how do we build this watch list uh this is just a watch list i made this morning looking for things that were breaking out i would suggest that you build a watch list and watch for these things to happen understand what kind of stock you're you're dealing with but if we look at where uber has been long consolidation breaks out consolidates again breaking out maybe this time the buy the sellers are no longer willing to sell and we get a better trend out of uber so let's go over here to the scan tab because what we're going to do is i'm going to show you how to scan for this i'll put this out on on the twitter as a matter of fact you can follow barb and i on twitter uh just by going to at p malawi underscore tda at pima lolly underscore tda or you can go to at b armstrong underscore tda by the way i bring this up for another reason uh in here i put in all the different percent returns that you see me use one week return two three four five six seven eight week and three month returns so there was something happened some of them became missing i must have done something but in any event they're back in there along with some other scripts that i use the conviction indicator that we just looked at with the s p the up down volume of the new york stock exchange and my three line script for the rsi and the wave volume we just we just looked at so if you want those go to uh go to twitter join me or join twitter follow me on twitter and go in there to my profile and click on that like i just did and copy these down they are case sensitive all right with that let's come in here and so i will put in here in twitter i will tweet out uh like we see down in you know some of these other areas i will tweet out uh the uh the scan itself uh today so um let's get back out there and build this scan so simply what we're gonna do here before we make any trades example trades today is we're going to go to the scan tab right there and then we're going to go to the subs tab stock hacker and i went over here to this waffle uh everything we're gonna use these areas in here uh i've pre-built some of this stuff and i'll show you what we did um but in uh in the effort in the respective time i'm not going to rebuild this but you'll you'll be able to do it yourself i'll go over it so you can do it yourself but i just reset everything and i'm going to go into this scan this waffle the second the waffle stack down hamburger stack cheese stack whatever you want and i'm going to come in here to um personal and this is the 55 65 i've typed in 50 60 but as an accident 55.65 this is
the rsi scan it's looking for stocks and this is what i was saying we don't want to have our charts cluttered up with a whole bunch of indicators we're looking for momentum we're looking for relative strength uh strengthen in you know over the overall market and we're looking for stocks that have popped to the upside so this is just a relative strength scan if i scan this it pulls up a certain amount of stocks that meet this criteria and this happens to be the material sector if i go to all stocks by appear in category and you can remember you can watch re-watch this i'll click here and now we have 251 uh in here if i get this scan again don't lock up on me there we go and now we have 253 that meet these parameters for the rsi we're just going what i did is we add a filter we're going to add a filter here in a second i just added a filter and in that filter i go to study so watch what i do here add filter study and to get these rsis i'm going to come over here to where it says adx crossover and i'm going to go into popular studies rsi scan and once i'm in there then i change this here to greater than 55 and then i put in another one just like i did up here greater than 65. but for in the essence of time what we're going to do is we're going to add that bollinger band right now so i'm going to add another filter we're going to do the same thing click add filter come down to study come over to adx crossover and then we're going to come down to crossover studies and hit bollinger bands crossover and so all this is saying all we're looking for has price hit one of the bands in this case we're looking for bullishness because we're in a bull market we're looking for rotate things that are rotating to the upside and we'll hit bollinger band crossover and once we do that you can see here it's a 20 period just like we have when there's two standard deviations simple moving average you can switch all this up to your liking and then we'll rescan because you know we can go over 253 stocks a lot of people a lot of us do it every night or more i'll rescan this and now we have 30. we have 30 in here and now i can take this left click save this as a watch list type in rsi 55 65 bollinger and then uh and then save it okay i've already done that so we're gonna come back over here to the chart tab and pop this down and you can see here's some of the stocks that popped up doordash an ipo popped up here so if we looked at if we looked at doordash what we're going to find and this is how we this what you're going to do you're just going to scan for these things make that red come down to studies hang on one second and in here bollinger bands with relative strength that's what i put in here and doordash doesn't have a lot of information so it can't um you wish you'd bought it back down in here but we don't have enough information has been around long enough for this to work so we look at uber and there's uber breaking to the upside uh we look at um camping world it's trying to break to the upside having a bit of a pullback uh zto express popping to the upside so you can see what i mean here things that are moving but what we want to do is compare the relative strength which ones do we choose just because it's down in relative strength does that mean uh that we ignore it well some of these we may put on our watch list because it's starting to move it's coming off and this is why we want to look at price because there there's a lot of clutter up in here so if we look at price as well then we we can start to determine uh some uh some biases are there buyers coming in is there is there strength or are these people coming in and really looking are they uh is this an opportunity for them to sell that's what we're looking for here so we just clicked through here a bunch of ipos here's holly frontier uh energy we saw energies in this one of the stronger uh one of the stronger sectors for the last several weeks right here energy and you're going to see in here there is also a lot of retail bed bath and beyond home depot starting to move to the upside a lot of earnings coming out too so that's basically what we're looking for that's how we've done that again back into the scan tab rsi i just look for you can change up your uh dollar amounts this says twenty dollars a minimum of 250 000 shares you can make any of these things but again i'm going to put this out on twitter and then you can adjust it however you however you wish so let's go back to the charts and start looking at these stocks so uber uber's holding up uber's doing well uh pushing uh breaking to the upside we're starting to see this formation here so if we come over here to price we've got the volume perhaps you want to go out there and buy uber where is it best to buy something is it best to buy something at support do buyers come in at support or do they come in at resistance and if we look at this if we look at this area of uber right now what i want you to notice i want you to recognize that this is just a smaller version of this okay i find myself a lot arguing with myself saying boy i really don't like these small sideways you know uh consolidations i'd like a much bigger consolidation but that's what happens they consolidate for a long while and then they start moving to the upside if we look at what happened with uber back here in august it started to make some noise finding resistance finding resistance and that is the importance of why i show the midpoint so let's take a look at this i'm going to grab the channel down in here grab that channel and use these horizontal lines to draw my channel lines easier so they're and there's that midpoint in there let's move this 200 day out of here there's that midpoint you can see not being able to come back down below the midpoint the first half of this consolidation it couldn't make it above that that area becomes pretty important and suddenly it's making it a it's moving above that the other thing i want you to understand about all this is not just about the bollinger bands that helps but it's about the there's this rectangle here and then inside of that rectangle are smaller rectangles and those smaller rectangles in this case create higher lows not higher highs but higher lows and then it breaks out so we're seeing something similar we don't really have too much in the way of smaller rectangles except for what we see over the last couple of last few weeks where we get this area in here and we get the volume so that's showing us some bullishness so what we're going to do here is we're going to put a stop we're going to we're going to come out and buy this stock it's trading at 58.63 we're going to put a stop below today's low that's going to push us down into here so a little more objective let's go below the low of yesterday and that low of yesterday is 53 so we'll drop down and go uh we'll we'll put our stop at 52.50
we'll get 50 cents below that uh and uh that's going to tell us that we have uh buying us a stock at 58 and 67 cents we'll buy it right now with a stop at 52.50 we're going to spend ten thousand dollars this is just another way of um uh money management i i look at other ways this is a new way we're looking at it right not a necessary new way this way we're looking at it right now we'll go back to other methods as we go forward in the year but 58 uh dollars and so we'll just say 59 we're going to divide 10 000 by 59 and that says we can buy 169 shares it's just now breaking out the market is weakening it could pull back we'll wait for a pullback to add into our position so what we're going to do is we're going to come over here to the trade tab put uber in and in uber what we're going to do is uh since this is a not a options class we can buy options we're going to do some of that again tomorrow we're going to do some of that again tomorrow and with that we're going to come down here 169 shares but we don't want to just buy that without a stop in place we want to learn especially in when we are new to to have an area that we're willing to exit out of so if we can buy 169 shares you can buy half of that you can buy a third of it you can buy two thirds of it whatever you want to do what we're going to do here is we're going to buy 80 shares 80 let's buy 85 shares i'm going to buy 85 shares put on about half and then we're going to come over and put our stop here at 50 to 50. so we're that we're down where we're objective we're being objective we're putting a stop in at a place that makes sense that if we can look at this chart and say if it's down here at 52.50
if it's in that area then it shouldn't be there right and so we want to be very careful about this if it comes down in there you might get taken out and then it might rock to the upside we can always get back in if it keeps falling then you're out with a small loss that's the point so we come in here and we want to change our stop loss not guarantee there's no guarantee to a good to cancel order we're looking to buy it right now right where it's at right now and we will hit confirm and send double check everything last week i had some i go too fast sometimes trying to get through all the things i want to talk about double checked everything 5250 is our stop 85 shares we'll send that off and we're filled on a on 85 shares of uber and what do we expect we expect it to continue to move to the upside all right doesn't mean it's going to happen emr a lot of these look very good in the morning sometimes they don't so you can if you wish invoke the close above the high of the low day type action which would be today so if we talk about what the heck do you mean buying above the high the low day after any period of consolidation whether it's sideways or down there's lows and those lows happen to be first low here second low is lower than the first low yesterday is low lower than the second low and so that's that that's that low day right and so if it's if you want to hang on and wait till the end of the day until this closes above this closes above the that closes for the day above the high of this day so in other words about where it is at least where it is right now if not if not higher then that's fine you can put a stop order in before we do any of this though let's make sure we've walked through all of the steps and what are the steps well we want something that's trading stronger than the market are beginning to trade stronger than the market uh and to do that we're going to look at relative strength what do we know we know just by looking at the chart that it's popped up into the upper band it's moved two standard deviations it's been as uh as tight as it's been for a while and often times when it gets into that zone we see it pop and run the issue here is this was another one that's been consolidating why because money has been in uh has been trading in other areas so if we look at the relative strength down in here we can see that sneaky sneaky it's been strengthening against the uh s p 500 since november and that's why we want to you know kind of take some of the clutter out and see what's going on not only is it strengthening since november uh it's drifting sideways but now it's at 52 week highs if we look back here at the old february january february highs from last year it's finally made it back up into that area things are rotating things are rotating into industrial stocks this happens to be emerson electric oftentimes we see strength in electrical when people forget about these guys these kind of companies but we see strength in electricity but again drifting sideways breaks to the upside people are not willing to uh stop selling and what do i mean by that it's not it has a bit of a drift to the upside higher highs and higher lows but we haven't seen anything in them in the magnitude of our typical uh uptrend that we like to see something like these back this side over in here we haven't seen that so perhaps it's starting to do that we don't know we look at the volumes down in here volumes picking up we look at this large volume node right in here i want to bring attention to this because there was a lot of of volume coming in above the 50-day moving average a few times five days in a row of uh selling and price really didn't go anywhere so if price didn't go anywhere on on increasing volume then that uh tells us a little bit about you know what the what the bias is in other words nobody's willing to really sell as a matter of fact zoom in a little bit closer on this and we look at five six days ago and we look at this low volume long range down day not a lot of selling and that actually took out these previous lows in here and once something once that happens and it rebounds that gives us a little bit of an idea as to how things are changing sloping up trending uh 20 period moving average and breaking uh to the upside now drifting sideways breaking to the upside today's volume we still have several hours to go in the day not looking too terribly bad but this might be something that you would consider to put on later in uh later in the day let's move again forward here's uh camping world long consolidation breaking to the upside the the issue here with camping world is not necessarily the not necessarily the moving or the bollinger band it is price action and it is relative strength we can see it's it's as tight as it's been so it's coiling up there's a lot of tension building up and that's what we see down in here that's why we look at we we look at this to get an understanding uh is what we're seeing and it doesn't have to be we don't have to see the uh the bollinger bands become really tight you can be fooled you can be fooled that's why we i some people like to look at the bollinger band width because sometimes they're wide but they're also as tight as they've been for a while so the question becomes here how much of this was a fake out today what happened to this is it outperforming the rest of the market and this is uh where the relative strength comes into play we zoom that in so you can see it'll get a little bit better picture of that and then we will come in here and i'm going to draw a downtrend line and we can see we're starting to break to the upside so if you wanted to if somebody wanted to come out here and put on in this case an example trade a paper trade uh to see how this all works out the expectations would be this this long sideways to down movement is changing we're seeing relative strength start to come back in if we look at this starting to really coil up into this triangle breaking to the upside let's look at this on a price chart and this has a you can see it's bouncing off that 200-day moving average we know that is an indication of strength now if we draw and this is where we want to be careful i i suggest that even though we might draw channel lines in here that's one that's just one thing of what we're looking at because inside of this inside of this channel i want you to start to recognize the horizontal nature nature as well of what's going on right the inside of this channel what do we see we see price bouncing up off of this low coming back down it can't get down below that mid point okay so that creates this other these other horizontal type uh pieces of action and if i were to draw those in i know this sounds this sounds like a lot of work uh i don't know of anybody that's uh done very well at much of anything that didn't do a lot of work so if i put in this other horizontal channel i want you to notice this is where what happens at when we penetrate the midpoint we penetrate these other lows what happens after that what happened after that is there's buyers that came in rallied it back up to horizontal resistance and uh downtrending resistance or supply where sellers come in sellers really didn't come in in force right now you could argue that well that's kind of december hey it's still volume and it bounced up it couldn't make it back down it's starting to show some strength look where it reversed today reversed at these horizontal levels without understanding that looking at those horizontal uh moves um what um let me remove that top one there this this hole you get faked out by these trend lines trend lines are dynamic and trend lines will move and you know from from down to sideways to up right and what we're trying to do is capture that move with a low risk idea to up and if we erase this channel line now and draw in a horizontal channel now we can see shake out fake out shake out fake out higher lows buyers coming in so this is something that this where this middle point you know uh and you can adjust that up and down i tend to adjust mine up and down to be a little more precise i call it the fulcrum a little bit higher and if it can finally if it holds in this area good volume today really strong volume at the 50-day moving average that this can hold in this area and start to push higher camping world might be something you may consider as a matter of fact in the halfway point uh let's say that you wanted to buy ten thousand dollars worth of this and it's trading at thirty dollars so you take ten thousand divided by thirty it says you can buy 333 shares you might put out a little uh throw out a little feeler trade you know a little trial trade not by 300 shares not buy 100 shares maybe buy 50 shares to see what it does and just to keep your eye on it you can also use options to keep your eye on it and doing something like that you don't find find yourself looking back it you know two weeks later and saying ah man i wish i'd have bought that because it broke out and rallied you know really strong and i missed the whole thing i was going to buy it right how many times have we done that so be very careful so let's go out here uh and what we're going to do is just do a little feeler trade on uh camper world holdings c wh just an example uh feeler trade and we're just gonna buy 50 shares uh buy 50 shares but even 50 shares need to have a stop loss which let's go ahead and put that stop loss below the low of yesterday which is 27.24 so we'll put it at 24 or 27. we're going to come over here right click buy custom with stop we're just going to buy 50 shares just to keep us just to make sure we're we're paying attention and i'll show you why you might consider doing this just beside the fact that you want to keep keep your eye on the ball so good to cancel 50 shares gonna buy it where it is right now got to put our stop in at 27.
and hit confirm and send and there we go boom now one of the reasons also is when we think about areas when you just look at this chart whether you're looking at on the diagonal or whether you're looking at it on the horizontal there are places that you can buy how many of us wish that you'd have bought down here right oh we could have bought that bounce off the 200 day how many of us freak out when it's falling like a a streamlined anvil on big oh i gotta wait right and so you can buy at these areas so you can buy somewhere in here you can buy at the midpoint and you can buy on the breakouts right you can buy as price pushes into that bollinger band as well okay that's just another technique that happens to be at the midpoint the bollinger band at the midpoint price at the midpoint good volume relative strength starting to break to the upside putting on a little small trade example trade to see where that takes us all right let's move on to another one uh ao schwartz ayo smith is it christmas still wasn't a o shorts a department store uh i guess i better stop and check some of the comments and questions out over in here so there's some questions about the etf class those are not uh recorded thank you uh barb mike's mentioning ubers and the mike mccarvel says hey uber's in a good sector industrial seem to be working well he wants to know if there's a survey if there is a survey please fill that out and answer the questions all right i'm looking at the exact rsi with spx he has in the chart d i'm not sure what that is okay so anyway let's get back to the trade so what do we see here we've got the bollinger band popping up from as tight as this is tight attention as it's had over the last 150 days that's what these dots are tight tension wide tension up in here wide wide space tight spaces and it's breaking to the upside we're getting relative strength to start trying to come out uh to the upside so this might be something you consider to hang on to a lot of people are are very uh focused on relative strength let's take a look at the price chart here and let's start putting in uh some some lines okay so draw here we know that it's uh really kind of creating a uh an ascending type triangle inside this ascending type triangle if you were to uh look for a midpoint about the only way you can do you can you can whoops that's not what i wanted to do you can define your midpoint by simply drawing a line looking where price has had a struggle to get above or below that area and why do we do that well we're looking to see if something is spending more time on the upper side of the consolidation or the lower side of the consolidation and here it's breaking to the upside again this is something if we look at ao smith what do they do we can come up here to the analyze tab and uh they're in industrials if that if the industrial sector if we're truly going to get infrastructure uh action or the anticipation anyway then we may see these continue to move right and so what do we know we know relative strength it's trying to expand in relative strength but we can see here through the volume nodes that all along in here this has been accumulation what appears to be accumulation as it starts to break out they start to show their uh the bulls start to show their horns their stripes and so this is something that you could put a possible trade on remember a lot of these are going to have earnings coming out so a lot of these may be actual short-term trades a lot of these could be actual short-term trades that you uh would get out of ahead of earnings or know that you're going to hedge it ahead of earnings if you want to hang on to it so ao schwartz i think that was uh smith that was the last one and all of these came from all of these here came from uh the scan now these scans will change oftentimes as the day goes on there's looks like there's some other ones that have shown up since uh i've done it why because uh the fact that price is moving price is moving uh all day long and they may actually hit that crossover of that bollinger band if that's the case what do we know looking at this looking at the recap looking at this whole idea here we're looking for tension we're looking for tension but we're looking for companies or stocks that have shown relative strength strong relative strength as well as strong momentum when i say strong momentum that's what the rsi is about if they are if they are uh if the rsi is above 55 and but below 65 a lot of these are going to be climbing up in momentum they're moving up in momentum we we pair that with the bollinger bands starting to pop to the upside using the bandwidth and the uh price popping to the upper band now we have more momentum suddenly coming in to these rsis and if the stock has been outperforming the rest of the market via relative strength or beginning to then that might be a place that you might uh consider so if we look at stocks like jp morgan we can see here uh jp morgan started to outperform back in here very similar type action and boom now it's trending so that's all we're looking for is to capture these trends uh and whether you want to do it on on a two or three day basis or a two week basis or a trend trade uh that's up to you but we're looking to get in at low risk entries using these kinds of ideas it to show this to save the scan in the watch list we come over here and there is a pancake stack there hamburger stack cheese stack that's a stack of horizontal lines and what we do there is we to save the watch list left click here save watch list give it a name and then save it once you save it all of these go away and they then we can come over here pop this down and if i come in here i've got a few of them in here let's see here rsi bollinger and i transpose that number right there uh so i just click on that here's rsi bollinger from some time ago that we ran this we go in here and we click on these and see what we what we can gain from these thor industries here's one that might be starting to uh starting to move teledoc so lots of ways to do this the issue becomes that you might find a bunch and this goes to why what mike said in the chats what mike mcardle said the chat's very important you might find so many you don't know which one to trade well what are we going to do well we'll look at what is moving what are the strongest industry groups and sectors out there so if it's energy and finance and materials and industrials then find those things if those are if they have strength over the last you know week two weeks whatever use those matter of fact remember uh that in in twitter you can come in and build all of those returns what are the strongest over the last week two weeks three weeks four weeks all the way out into three months or one quarter basically one quarter is worth the time all right speaking of time we have to go everybody stay safe remember that coming up next is uh technically speaking with connie hill uh trading stocks and options so stick around for connie follow that up with long options today at three o'clock eastern time with mike folette and then cameron may generating income in your portfolio income strategies i want to thank barb as well as everybody else in the chats really appreciate it but you can't it's best to get ready it's best to have get on your market set go know what you're going to do know why you're doing it in in particular today what we what we looked at is is there tension building up and have we is that tension starting to pop is the stock outperforming the the majority of the stocks on a relative basis and then break it down into price action where is it in the in volume where is it in the overall scheme of things uh horizontally once you get practiced in this you're going to start seeing in and realizing things that you might not have it doesn't take very long but things that you might not have understood before and then of course we use those scans um you get my scripts uh one more time from twitter let's see that's wilmer you get he says where do i get your scripts twitter follow me on twitter at pimalally underscore tda come into my profile uh just at pima lolly underscore tda and it'll be the top the top uh tweet or whatever they whatever you call it and in here there's a bunch of different uh things and these are the scripts that you can put into the think or swim platform all right with that everybody have a wonderful day i've over stayed my uh my time but i do appreciate you sticking with me remember everything we're doing here is for educational purposes only and only you are responsible for your decisions made in your self-directed account thanks a lot everyone thanks barb for talking [Music]