Unless you are already a subscriber, you may not realize how simple, yet powerful, the preset scans of the Morpheus Stock Screener really are.
To demonstrate, today’s blog post is based exclusively on a “Potential Breakout” stock scan that was run only on the NASDAQ exchange (data is currently available for US, Canada, UK, and India markets).
Sorted by descending relative strength, here is the list of results that was produced when I ran the scan last night (click image to view in new window):
As shown above, there were 12 stocks that made the cut with our strict, predefined, and proprietary filters for minimum price, minimum volume, top relative strength, and bullish chart pattern.
Stealth Stock Picks
A “stealth” stock is the term I use for a stock that is not “on the radar screen” of every daytrader and his cousin.
Stocks such as Tesla ($TSLA) or Apple ($AAPL) are two examples of the big dogs that many traders simply default to monitoring and trading every day.
I have found that stealth stocks tend to move in a more “predictable” manner, yet still provide ample volatility if the right stocks are selected.
One of the best features of the Morpheus stock scanning software is that it quickly and easily enables you to find these types of stealth trade setups for momentum swing trading.
Upon flipping through the charts of the 12 stocks returned in the scan results, the stealth stock I like best for potential buy entry now is Providence Service Corp. ($PRSC).
Below is the daily chart of $PRSC (screenshot courtesy of Morpheus Stock Screener):
Since breaking out on August 7 (positive reaction to quarterly earnings), $PRSC has been forming a solid base of consolidation near its all-time highs.
A flat base consolidation typically requires 4 to 6 weeks of formation before the stock breaks out to fresh highs, and the base-building in this stock is now 7 weeks in the making (learn more about consolidation patterns here).
Last week, the stock “undercut” support of both its 20-day exponential moving average (beige line) and 50-day moving average (teal line), but the price only stayed there a few days before snapping back above those key moving averages.
On September 23, $PRSC rallied to close at its highest level since the August 7 breakout.
Putting it all together, odds are good that $PRSC may now be ready to embark on another leg up to another new high.
Here’s The Play
Since $PRSC now has minimal overhead resistance, the stock could be bought for momentum swing trade entry on a move above the September 23 high of $47.54 (remember not to jump the gun with ahead of the actual trigger price).
With that entry price, a protective stop could be placed just below the $45 area (below both the Sept. 23 low and convergence of the 20/50-day moving averages).
If $PRSC breaks out from here and clears all overhead resistance, this momentum trade presents a favorable reward-risk ratio.
However, as I have been discussing in my nightly swing trading newsletter (which includes access to the stock screener) over the past few days, all bets are off on the long side of the market if the S&P 500 or NASDAQ convincingly fails to hold support of its 50-day moving average.
What other “stealth” stocks are you targeting right now? Drop us a comment below.