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Channeling Stocks,sometimes called Rolling Stocks, are stocks that tend to trade within a price range.The idea,obviously, is to buy them when they are at the low end of the range and sell them when they are at the high end of the range. For traders interested in such an idea, there are a couple of subscription sites,but it should be possible to compile our own list of suitable stocks if there is enough interest.
I have a preliminary list,which I need to check further but I'll post the first one :

BDCO

Hopefully,other traders will post stocks which they consider Channeling Stocks.

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A couple more stocks near the bottom of channel:

FNSR
PLUG

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nice call on plug, ill be looking to pick that up once it falls again. Good board!

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The Don
Thanks, but it actually was not a call to buy. I just listed it as a candidate channeling stock that was near the bottom of its range.
Although thru the years I've tried to buy stocks near support,I've never made a watchlist of such stocks. Undoubtedly,it is not enough for a stock to be fluctuating within a range.The amplitude and frequency of the fluctuations need to be considered to make the trade worthwhile.
Hopefully,there'll be enough interest in this subject to start it going.

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Very good thread... I've actually been reading up on channeling or ranges but more for the FOREX market then for stocks but can be applied for any financial market..basically you buy at support and sell at resistance while having a stop/loss just below support... or just above resistance if your going short... for those interested in this topic i recommend this book:

http://www.amazon.com/gp/product/0471933317/ref=pd_cp_b_title/103-1808117-550306 2

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As you can see, this thread is still "under construction".
I've taken a rather short survey of possible channeling candidates to determine the probable frequency of trading the same stock over the last 6 months. It appears that the probable number of trades of the same stock would be about 4 times.I arrived at this conclusion using Stochastics (5,3,3)with a buy occurring when the stochastic was oversold (20), and selling when it reached overbought (80).I ignored fluctuations between those two levels. So it appears that the holding period of a trade would be 4 to 6 six weeks.My math may have flaws in it, but this method wouldn't be quick one-week trades in general.Of course,there's always exceptions.
I should note that under the above frequency criteria, the stock I mentioned in my first post, BDCO,would not make a good candidate for this system. Although BDCO fluctuates considerably,the fluctuations are between the oversold and overbought range, not quite reaching either level.This implies that they may not be large enough to be profitable.However,the actual price range of the individual stock needs to be considered.
As always,comments/ideas are welcome.

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Good trend also. There are a lot of stocks that move 3-5% everyday. I have a couple but will post sometime when I get some time.
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I can see that it will take some work just to start with a manageable watchlist.
To start, I'm considering limiting the price range to between $1 to $6.I was considering using high-beta stocks, but most are technology stocks and the watchlist probably should include stocks of several sectors.
Also,I'm concentrating on stocks whose linear regression channels are either trending sideways or in an uptrend.I feel that stocks in downtrending channels usually have some problems, and the intent of trading channeling stocks is not to hope for a rebound in a troubled stock, but to use the natural cycling of healthy stocks.
There are several other things to consider, so these are only the beginning thoughts.

Comments are welcomed.

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Using the generally-accepted scientific method of "eyeballing" the cycles during the last six months,or so,of quite a few low-priced stocks ($1 to $6)this is a preliminary list.I'm sure that it will be reduced once the channel widths are inspected to determine if trading a particular stock may be profitable.
The stocks were selected primarily by counting how many times it rose from an oversold condition to an overbought condition, in a six-month period.Most of these stocks did that about four times. I should note that not all are in an oversold (buy) condition at present.

Technology Stocks:
AIRN ARTG AMCC ADPT BSQR CAMD CNXT CMGI CTLM FCSE FNSR GTW KOPN LNUX LVLT MSPD PNS SONE SANM SLR SFE STKR TXCC ZHNE ZL

Healthcare/Bio:
ALTH GTCB SNUS

Metals/ Mining:
BGO DROOY NXG TGB

Oil/Energy:
ABP RTK SGU

Elect Equipment:
ACPW HYGS PLUG

Service/Consumer:
QTWW SFP SIX TQNT UFI UBET

Other :
ALTI IOTN

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I've divided the stocks into three stochastics(5,3,3)levels.I'm just using stochastics as a yardstick, but any of several other indicators, such as Williams %R or RSI can be used, depending on an individual's preference.
The three stochastic ranges are :
LOW : 0 to 30
MIDDLE : 31 to 69
HIGH : 70 to 100

Generally,a stock is considered oversold when below 20 and overbought when above 80, but I'm expanding those two areas a little.

I should note that just because a stock is in the LOW RANGE, it is not a buy. It is necessary that it is rising, rather than falling.
The number in parenthesis after a stock is the stochastic value, not the price.Of course, the value usually changes daily, so this is just a guide.

LOW RANGE: SFP(10) IOTN(16) BGO(17) GTCB(16)
CNXT(18) CMGI(19) ABP(19) TQNT(17) QTWW(22)
UBET(23) ALTI(23) NMSS(24) SANM(25) ALTH(26)
HYGS(26) SIX(25) TXCC(27) TKO(30)

MIDDLE RANGE: ARTG(32) KOPN(31) PNS(32) RTK(32)
SFE(33) SNUS(36) TGB(41) AMCC(55) CAMD(51)
CTLM(59) DROOY(59) FCSE(59) FNSR(56) LNUX(49)
SONE(49) SLR(55) ADPT(63) LVLT(61) MSPD(68)
PLUG(63) STKR(65)

HIGH RANGE : ACPW(72) BSQR(79) GTW(77) NXG(71)
UFI(73) SGU(82)

OK, I know I missed a couple, but this is just a sample guide for those interested in channeling or "rolling" stocks. Each person can set his own guidelines.

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Some thoughts on when to buy.....
Of course, the idea is to buy oversold stocks. I remember that FST (Florida Swing Trader),who was the moderator,advised waiting for the second higher daily low in the price of the stock, the Stochastics starting to point up, and improving Money Flow. All good ideas.
My method is similar:Stochastics starting to point up, RSI(3)crossing above 20, and MFI(3)crossing above 20.
Each person probably uses different indicators,but the idea is to wait for some sign that the stock is starting to recuperate.

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I like your system, Who. The stocks on your list that I've been watching are cnxt, bgo, cmgi, qtww, sanm, tko, artg, tgb, amcc, drooy, fnsr, lvlt, mspd, gtw, ufi.

Other stocks I keep an eye on are artx, umc, zixi, ibis, pxpl, nest, zhne, synm, tmta, trmm and R1's pick - ont. There's more but that's enough for now.

I do rely on fundamentals - just as much as charts if not more. But you gotta know the charts too because too many things happen in the market that defy rationale. You can own stock in a good, financially sound business but for some weird reason public sentiment is against it and you're cooked!

Anyway, good thread. Keep it going. I hope Kevin posts again too.

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Ladybird-
I did have ZHNE (45) and ZL(34) on my list, but somehow they fell thru the cracks. As I mentioned,I tried to visually pick stocks that tended to fluctuate from oversold to overbought about 4 times in the last 6 months. I'm sure there are a lot more.
This seems to be a fairly conservative system,so regardless of what the young man on TV advertising a channeling stock system says,I doubt that too many young men are going to retire in their twenties.
For what it's worth, I'm listing the Stoch %K numbers for some indexes:

Biotech MVB.X (21)
Gold GOX (30)
Semiconductor SOX (61)
Oil OIX (64)

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After applying my rather flexible "rules of thumb" to Ladybird's list of stocks, it seems that at least TMTA(23) and UMC (31)could be included as channeling stocks. Others come close.

I should note that this thread is merely a discussion of a trading system, and does not necessarily recommend buying any of the stocks mentioned. However, any ideas that may improve the system are welcomed.

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I'm adding ONT(84) and AIRN(90) to the HIGH RANGE.

Right now I'm just compiling and classifying stocks that may be channeling stocks.I'm not doing any research on their fundamentals.Basically,I'm just using stoch(5,3,3)to classify them however,soon I'll try to discuss sindividual stocks in the LOW RANGE (buy range)and mention their fluctuation frequency, RSI(3) and MFI(3) because that's what I use to try to determine if they are really "buys". I probably won't try discuss stocks in the HIGH RANGE (overbought),other than just list them in the range.
FWIW,I do use a couple of scans from Stockfetcher.com and use ASKresearch.com and a couple of other free sites, butI have no trading software, since I do not daytrade..

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I'm still working in trying to come up with a list of channeling stocks. So far, I have a preliminary list. My thoughts are to see if I can get some opinions on specific stocks on the list as to whether they qualify as channeling stocks.The main criteria being that the stock has fairly regular oscillations between oversold (LOW RANGE) and overbought (HIGH RANGE) ranges, and whether the amplitude of the oscillations are wide enough that they can be profitably traded.

Stock: ABP Abraxas Petroleum
Sector: Oil/Energy
Price : 3.59
Range :LOW
Stoch (5,3)Level:18 (Oversold)

It looks like ABP has oscillated between oversold and overbought about 5 times in the last 6 months.

What's your opinion as to whether it qualifies as a channeling stock that can be regularly traded profitably?

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Stock: ALTH Allos Therapeutics
Sector/Industry:Healthcare/Biotech
Price: 6.07
Range:LOW
Stoch(5,3)level: 26
MFI(3): 0
RSI(3):16

ALTH has oscillated between oversold and overbought ranges about 4 times in the last 6 months.

Opinions ?

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Stock: ALTI Altair Nanotechnologies
Sector/Industry: Materials/Chemicals
Price: 2.66
Range : LOW
Stoch(5,3): 24
MFI(3): 32
RSI(3): 15
Number of Oscillations: 4 to 5

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The Four Stages of A Cycle ...
I can't find my book now, but several years ago I read a book about the four stages of a cycle.I think it was written by Weinstein, but I may be wrong.Anyway, Stage 1 was the basing stage, followed by Stage 2 as the stock broke out of Stage 2. Stage 3 was the top and Stage 4 was the downtrend. The author recommended buying when the stock broke up from Stage 1 into Stage 2.
So,actually,I consider my LOW, MIDDLE, and HIGH LEVELS to correspond to his first three stages.
The only thing is that I'm trying to apply his system to channeling stocks, which may increase the predictability..

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Still plugging along as I have the time...

BGO Bema Gold
Sector/Industry: Metals&Mining
Price:4.98
Range:LOW
Stoch(5,3):8
RSI(3):7
MFI(3):23
No.of OSC: 4 or 5
----------------------------------------------
CNXT Conextant
Sector/Industry:Info Tech/Semiconductors
Price:2.13
Range:LOW
Stoch(5,3):13
RSI(3): 31
MFI(3): 27
No.of OSC: 4 or 5

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Three more in the LOW RANGE.
Although I defined the LOW RANGE as from 0 to 30,it was primarily to divide the ranges into three roughly equal portions.I actually borrowed the use of Stoch(5,3),RSI(3)and MFI(3)from a filter I've been using for some time now, and combined it with the number of oscillations within a channel.In the original filter,a BUY signal was triggered when both RSI(3)and MFI(3)both crossed above 20 and there was a crossing of Stoch %K over %D.But this is not a mechanical system, so some judgement needs to be used.

IOTN
Aerospace & Defense
Price: 4.14
Range: LOW
Stoch(5,3): 25
RSI(3): 63
MFI(3): 69
No. of OSC: 4
---------------------------
LNUX
Info Tech/Software
Price: 4.93
Range :LOW
Stoch(5,3):29
RSI(3):34
MFI(3):26
No. of OSC: 4
--------------------------------

NMSS
Info Tech/Comm Equip
Price:1.88
Range: LOW
Stoch(5,3):26
RSI(3):51
MFI(3):50
No.of OSC: 4


NOTE: For those getting bored with this thread, the good news is that I don't intend to list the stocks in the MEDIUM and HIGH ranges.

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This is the last of the LOW range.I eliminated QTWW and RTK from consideration.I also replaced MFI(3)with MFI(5)because MFI(5)is more stable and easier to compare with Stoch(5,3).Actually,it appears that the direction of MFI is more important than its actual level. Also,it appears that in a lot of cases, MFI is a leading indicator.But it may be my imagination.
I should note that I've tried to describe how a channeling trading system could be setup.To maintain its status in a thread would be a full-time job because prices and indicators are constantly changing.However, if there is any interest,I may update it periodically.

SFP
Consumer/Household
Price:2.48
Range:LOW
Stoch: 5
RSI(3):20
MFI(5):47
No.of OSC: 3
------------------------------
SIX Six Flags
Consumer/Leisure
Price: 5.38
Range:LOW
Stoch :28
RSI(3):46
MFI(5):32
No.of OSC: 3 or 4
---------------------------------
TQNT Triquint Semiconductor
Info Tech/Semiconductors
Price:4.68
Range:LOW
Stoch: 17
RSI(3): 33
MFI(5): 26
No. of OSC:5
-------------------------------------
TXCC Transwitch
Price:1.55
Range:LOW
Stoch: 25
RSI(3): 30
MFI(5): 27
No.of OSC: 3 or 4
----------------------------------
UBET Youbet.com
Consumer/Leisure
Price:3.57
Range:LOW
Stoch: 19
RSI(3): 14
MFI(5): 17
No.of OSC:
-------------------------------------


THE END

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Excercise for the week:
Would it be profitable to buy the most oversold stocks in the LOW RANGE?
To arrive at their oversold rating, I'll add each stock's %K, RSI(3),and MFI(5)levels. The lowest the total,the more oversold.

GROUP 1 - MOST OVERSOLD
-----------------------
BGO 4.98 (31)
ABP 3.59 (31)
ALTH 6.07 (34)
UBET 3.48 (50)
CNXT 2.13 (60)
ALTI 2.66 (64)
SFP 2.48 (72)
TQNT 4.64 (76)

GROUP 2
--------
TXCC 1.52 (82)
SANM 3.57 (90)
SIX 5.38 (106)
CMGI 1.43 (123)
HYGS 1.36 (129)
NMSS 1.88 (131)
GTCB 1.11 (138)
IOTN 4.14 (138)

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Decisions, decisions...
The two most oversold stocks on the list are BGO and ABP. Which one to buy?
BGO is in the Gold sector and ABP is in the Oil sector. THe Gold sector is more oversold than the Oil sector.
ABP has been doing worse than its sector,while BGO is more "in sync" with its sector.
Decisions, decisions...

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OK,decided in favor of BGO.
BGO opened "green" while ABP opened "red".
Also,I like the fact that BGO is "in sync" with its sector.

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BGO is doing well this morning.

The EOD scan for OVERSOLD/OVERBOUGHT stocks yesterday was :

OVERSOLD : ABP and BGO

OVERBOUGHT : AIRN

I think I'll have to find more Channeling stocks for the watchlist.....

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OVERSOLD :
----------
STEM and NVAX both in the (MVBX) Healthcare sector

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