Technical Stock Screeners: Find Trading Opportunities with Charts

Technical stock screeners help traders find stocks showing specific price patterns, momentum characteristics, or indicator signals. Instead of analyzing financial statements, technical screeners focus on price action and volume to identify potential trading opportunities in real-time.

What is a Technical Stock Screener?

A technical stock screener filters stocks based on chart-related criteria such as price movements, volume patterns, and technical indicator values. These tools are essential for traders who rely on technical analysis to make trading decisions, helping them scan thousands of stocks in seconds to find setups that match their trading strategy.

Essential Technical Indicators for Screening

1. Moving Averages

Moving averages smooth out price data to identify trends. Common screening criteria include:

• Golden Cross: 50-day MA crossing above 200-day MA (bullish signal)
• Death Cross: 50-day MA crossing below 200-day MA (bearish signal)
• Price above MA: Stock trading above its 20, 50, or 200-day moving average
• MA slope: Moving average trending up or down

2. Relative Strength Index (RSI)

RSI measures momentum on a scale of 0 to 100. Common screening thresholds:

• Oversold: RSI below 30 (potential buying opportunity)
• Overbought: RSI above 70 (potential selling opportunity)
• Bullish divergence: Price making new lows while RSI makes higher lows
• RSI breakout: RSI crossing above 50 from below

3. MACD (Moving Average Convergence Divergence)

MACD shows the relationship between two moving averages. Screen for:

• MACD crossover: MACD line crossing above signal line
• Zero line cross: MACD crossing above or below zero
• Histogram expansion: Growing MACD histogram bars

4. Volume Analysis

Volume confirms price movements. Important volume screens include:

• Volume spike: Current volume 2x or more than average
• Accumulation: Price up on higher than average volume
• Volume breakout: Price breaking resistance on heavy volume

5. Bollinger Bands

Bollinger Bands measure volatility and potential reversal points:

• Squeeze: Bands narrowing, indicating potential breakout
• Touch lower band: Price reaching oversold levels
• Breakout above upper band: Strong momentum continuation

Popular Technical Screening Strategies

Breakout Screen

Find stocks breaking out of consolidation patterns:

• Price making new 52-week high or 20-day high
• Volume at least 50% above 20-day average
• RSI between 50 and 70 (strong but not overbought)
• Price above all major moving averages

Pullback Entry Screen

Find stocks in uptrends that have pulled back to support:

• Price above 200-day moving average
• Price pulled back to 20-day or 50-day moving average
• RSI between 40 and 50 (not oversold, but cooled off)
• Previous uptrend of at least 10%

Reversal Screen

Identify potential trend reversals for contrarian trades:

• RSI below 30 or above 70
• Price at or near Bollinger Band extremes
• Candlestick reversal pattern (hammer, engulfing, doji)
• Divergence between price and RSI or MACD

Combining Multiple Indicators

The most effective technical screens combine multiple indicators for confirmation. Here is how to layer your criteria:

• Start with trend: Use moving averages to determine the overall direction.
• Add momentum: Use RSI or MACD to confirm the trend has strength.
• Confirm with volume: Ensure price movements have volume support.
• Fine-tune entry: Use specific patterns or levels for precise entries.

Real-Time vs. End-of-Day Screening

Technical screens can run at different intervals:

Intraday Screens

• Run during market hours
• Useful for day traders and scalpers
• Focus on short-term patterns and momentum
• Require fast data feeds

End-of-Day Screens

• Run after market close
• Better for swing traders and position traders
• More reliable signals with complete daily data
• Allows time for thorough analysis before next session

Common Technical Screening Mistakes

Avoid these pitfalls when using technical screeners:

• Over-optimization: Adding too many filters may miss good setups. Keep screens simple.
• Ignoring context: A bullish signal during a market crash may not work. Consider overall market conditions.
• Chasing signals: By the time you see the signal, the move may be over. Combine with proper entry techniques.
• Ignoring liquidity: Always include minimum volume filters to ensure you can enter and exit positions.
• Not backtesting: Test your screen criteria on historical data to see how it would have performed.

Building an Effective Screening Workflow

Follow this process to get the most from technical screens:

• Define your trading style: Day trading, swing trading, or position trading will determine your timeframes and indicators.
• Create focused screens: Have separate screens for breakouts, pullbacks, and reversals.
• Run screens at consistent times: Build a routine around when you scan for opportunities.
• Review charts manually: Screen results are starting points. Always review charts before trading.
• Track performance: Record which screen setups lead to profitable trades and which do not.

Summary

Technical stock screeners are powerful tools for finding trading opportunities based on price action, volume, and indicator signals. By combining multiple indicators like moving averages, RSI, MACD, and volume analysis, you can create effective screens that match your trading strategy. Remember that screens provide candidates for further analysis, not automatic buy signals.

Want to explore more screening approaches? Check out our guide on momentum stock screens or learn about fundamental stock screeners for a different perspective on finding opportunities.