Finding the right stocks is half the battle in swing trading. The best setups mean nothing if you are watching the wrong stocks. This guide shows you how to find ideal swing trading candidates and build a watchlist that generates consistent opportunities.
Characteristics of Good Swing Trading Stocks
Not every stock is suitable for swing trading. Look for these qualities:
1. Liquidity
You need to enter and exit positions easily. Look for:
- Average daily volume of at least 500,000 shares
- Tight bid-ask spreads (under 0.5% of stock price)
- Market cap over $1 billion for most reliable liquidity
2. Volatility
Swing trading requires price movement. Stocks that barely move will not generate profits worth the risk.
- Average True Range (ATR) of at least 2-3% daily
- Regular swings of 10-20% over weeks
- Beta above 1.0 for more market movement
3. Clean Chart Patterns
Look for stocks that respect technical levels:
- Clear support and resistance levels
- Recognizable chart patterns
- Responds well to moving averages
- Volume confirms price moves
Avoid: Penny stocks, illiquid stocks, stocks with erratic price action, and stocks that do not follow technical patterns.
Screening Criteria for Swing Trades
Use these filters to narrow down thousands of stocks to a manageable watchlist:
Basic Filters
- Price: $10 to $200 (liquid, not too cheap, not too expensive)
- Volume: Average volume above 500,000 shares
- Market cap: Above $1 billion (mid and large cap)
Trend Filters
- Uptrend: Price above 50-day and 200-day moving averages
- Relative strength: Stock outperforming the market over 1-3 months
- New highs: Near 52-week high or breaking out
Momentum Filters
- RSI range: Between 40 and 60 for pullback entries
- MACD: Bullish crossover or positive histogram
- Price action: Consolidating after a move up
Where to Find Swing Trade Ideas
Stock Screeners
Free screeners can find stocks meeting your criteria:
- Finviz: Powerful free screener with technical filters
- TradingView: Built-in screener with custom filters
- Your broker: Most brokers offer basic screening tools
Sector Analysis
Strong sectors produce strong swing trades:
- Identify sectors showing relative strength
- Focus on leading stocks within strong sectors
- Avoid lagging sectors even if individual stocks look good
52-Week High Lists
Stocks making new highs often continue higher. Check daily lists of stocks hitting 52-week highs and look for:
- Pullbacks from new highs
- Consolidation patterns near highs
- Volume confirmation on breakouts
Earnings Movers
Stocks that gap up on earnings often provide swing opportunities:
- Look for pullbacks after strong earnings reactions
- Focus on gaps that hold and build a base
- The first pullback after a positive earnings surprise can be a powerful entry
Building Your Watchlist
Watchlist Size
Keep your watchlist manageable:
- Active list: 10-20 stocks you check daily
- Secondary list: 20-40 stocks on your radar
- Sector ETFs: 8-10 sector ETFs for market context
Organizing Your Watchlist
Sort stocks by setup stage:
- Setting up: Forming a pattern but not ready yet
- Alert: Near trigger point, watching closely
- Active: Triggered and in a position
- Extended: Ran too far, waiting for pullback
Quality over quantity: It is better to know 15 stocks deeply than to glance at 100 stocks superficially. Focus your attention where it matters.
Swing Trade Screener Examples
Pullback in Uptrend Screener
- Price above 200-day SMA
- Price within 5% of 20-day EMA
- RSI between 40 and 55
- Volume below average (selling drying up)
Breakout Screener
- Price at 52-week high or within 5%
- Volume above 1.5x average
- Price above all major moving averages
- Relative strength positive vs. S&P 500
Oversold Bounce Screener
- Price above 200-day SMA (uptrend still intact)
- RSI below 35 (short-term oversold)
- Price at or near 50-day SMA support
- Sector in uptrend
Stocks to Avoid
Skip these types of stocks for swing trading:
- Low volume: Hard to enter and exit, wide spreads
- Penny stocks: Manipulated, unreliable patterns
- Extreme volatility: Meme stocks are unpredictable
- Downtrends: Catching falling knives is risky
- Pre-earnings: Binary events add unnecessary risk
- Heavily shorted: Can have explosive but unpredictable moves
Weekly Routine for Finding Stocks
Weekend Analysis
- Run screeners to find new candidates
- Review each chart and note setup stage
- Set alerts for key price levels
- Check economic and earnings calendar
Daily Review
- Check pre-market for news on watchlist stocks
- Review which stocks hit alert levels
- Update setup status for each stock
- Remove stocks that no longer meet criteria
Track Your Watchlist Performance
Pro Trader Dashboard helps you track which stocks and setups generate the best returns. Build your edge over time.
Summary
Finding good swing trading stocks requires systematic screening and consistent watchlist management. Focus on liquid, volatile stocks with clean technical patterns. Use screeners to find candidates meeting your criteria, then organize your watchlist by setup stage. Run your screeners weekly, review daily, and always know why each stock is on your list. Quality watchlist management leads to better trade selection and improved results.
Ready to enter trades? Learn about entry signals and technical indicators for swing trading.