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Identifying stocks that have been oversold

Discussion in 'ASX Stock Chat' started by markrmau, May 4, 2005.

  1. markrmau

    markrmau

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    Now by no means do I advocate bottom picking, but I think there are stocks that have been oversold. The question is, what technical indicator would you use to work out when the panic selling has stopped?
     
  2. tech/a

    tech/a No Ordinary Duck

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    Re: Stocks that have been oversold....

    Mark.

    You should be looking at stocks that are in consistant up trends without having the LONGTERM trend broken
    IE the correction is within the trend.
    There are some which have been bought up and were way overbought EG QBE so the correction is happening.

    Eventually it will be percieved by the market that these stocks are now a bargain so buying will return.

    So characteristics.
    (1) Retracement within the dominent trend.
    (2) Retracement higher than 50% of the last primary up move.
    (3) Try to find a clear cut 3 or 5 wave correction.
    (4) Dont buy anything long thats STILL under is 180 day M/A so this would be a primary filter.
    (5) Have a stop and enter in say 3 buys 2 at least.
    (6) look for clear commecement of buying.
    (a) Volume on the rise.
    (b) A good one is a retest of the low which returns a higher low then once a new high is made(In the current move--V the corrective move) then this is a confirmation.
    (7) You could look for a return to + DMI (Positive Directional movement) but then most of the move maybe gone.
    (8) Id really like to see the index showing a turn before trying to pick individual stocks that are going against the index---(The index falling and trying to pick stocks going in the opposite direction)

    Finally then look for the NEW UPMOVE to show any weakness like failing to continue to make higher lows and higher highs.
    There is a good chance many may begin some long term ranging.

    Option players play grounds.

    Anyway a few suggestions from a techie on the side.
     
  3. DTM

    DTM

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    Re: Stocks that have been oversold....

    Nice advice Tech. :bigthumb:
     
  4. canny

    canny

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    Re: Stocks that have been oversold....

    Waiting for great picks from the good chartists please!
    I've done my analysis on todays movements - with my parameters set only for under $10 stocks and options.
    The only ones that come up as oversold AND are above their 180 day m/a are URL JUM and MAY - but MAY opened today with a big gap that I don't like.
    Don't know anything about URL - but maybe the old Jumbo will have a good day tomorrow?
     
  5. markrmau

    markrmau

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    Re: Stocks that have been oversold....

    Thanks for the detailed response Tech.
     
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