Finviz.com is what I use for scanning stocks for the next day. Their service is free and you can even create an account to save your scanner filters so you don't have to manually change them every time. I use 6 filters, which you can see in yellow in the pic below. But the two main things I'm looking at are circled in red and those are:
Stocks making a new 52 week-high
-These are of interest because the stocks are hitting the highest price they've hit all year. Meaning that no one who bought this in the past 365 days, and is still holding it, is down money on it. So one of two things will most likely happen here. The stock is guna keep going higher because new buyers are guna step in and people who already own shares wont have an incentive to sell since they're already in the green. Or there is guna be profit taking causing a sell off and price is guna fade. Simple supply and demand rules. As a trader, I'm not trying to predict exactly which way price is headed. My job is to make a plan for all possible scenarios that could take place and then react to price action.
Stocks with relative volume over 1
-Relative volume over 1 means that they are trading an amount of shares that is at least as much as their average daily volume. These are stocks that are "in play" and that have a more than the usual amount of transactions taking place. The more volume usually means the more volatile a stock will be, giving you better opportunities for a trade.
After liking the daily chart, I pulled up the intraday chart from Wednesday. $45 acted as resistance on this time frame as well, tapping it twice throughout the day, but never breaking through it. Its also important to note that on Wednesday the stock opened at around $38 and even after it ran all the way to $45 and faded off that point a little bit, it still had a pretty strong close at around $44 right at the VWAP. So knowing that it still had strength after bouncing off that key level of resistance twice made me think that maybe there isn't going be a sell off and that the stock could def go higher. So I went into the next day a little bullish biased. but still prepared to short the stock off $45 if it happens to be that it cant break through it.
Below is the 5 minute intraday chart for the whole week. After scouting this stock on wednesday night, it setup perfectly on thursday morning. Right at the open you can see the stock is showing strength and blows past that $45 key level of resistance on the first few candles. Once it consolidates for a few minutes and $45 turned into support, it gave me a great low-risk entry opportunity.
And then finally below is the daily chart after it made the move I was looking for. $NHTC was a perfect example of a clean setup right off the scan. These kind of plays have been the only ones I really feel comfortable trading since all the August/September volatility that happened, so its important I write about them to fully understand how they develop and hopefully become more discipline to sticking strictly to them.
