This thread is intended to identify stocks with the potential to rise or fall purely on the basis of the Neilson Smart Money Analyser, available to subscribers of the Inside Trader ($550 pa), found here:-
I'm creating a separate thread so that we don't have to debate whether or not a potential price movement satisfies the rules of a "breakout" thread. And by insisting on a standard indicator we can protect the thread from ramping.
Caveat Lector! Reader beware!
The charts are only an INDICATOR of POTENTIAL price direction. They are only useful in conjuction with your own other research.
How does the analyser work?
The indicators are based on an end of day scan taken from the depth queue after the market has closed each day. They compare the buying pressure of the shares (the supply demand indicator, blue line) to the pressure of the individual buyers (smart money indicator, black line) which we can see in the depth queue. Simply, when the black line increases, it means that the buyers (on average) are prepared to buy more shares than the sellers are prepared to sell. When the black line goes down, it means that the sellers (on average) want to sell more shares than people are prepared to buy.
When the ratio is one, it means that the buyers and sellers are wanting to trade the same average size parcel.
The "smart money" bit assumes that some of these high volume buyers or sellers know something you don't. If used in conjunction with your other research, this can be a useful clue as to the future price action - especially in the small to mid cap stocks. But used in isolation it can be misleading, and it does not work with big cap stocks.
The above is a brief summary only. For more comprehensive information, including warnings, check out the tutorial (which may require purchase unless available for a free trial):-
My interest: I like to use the indicator before I make a decision to trade, especially when trading overnight. It helps me to time my trades and adds confidence to decisions. I don't use it alone. I have no interest or relationship with the Inside Trader, and start this thread from the point of view of making a potentially useful contribution to the ASF in return for the benefits the ASF gives me. I hope it encourages others to buy and use the analyser and contribute to this thread because there is NO WAY I can afford the time to do much more than post the occasional chart I find interesting. On that note I won't be acting as a de-facto Inside Trader Service by scanning every stock people want to see.
Following this post will be some examples.