The following is a sample of the kind of list generated by this scan. Lists include the symbol, name, date of posting, closing price, percent change in price, and the percent change in volume.  A stock may remain on the list a few days after it first appears.  The lists now differ from the following list in that stocks are listed in the order of their volume surge (those with the greatest volume surge are at the top of the list).

Although we do not provide charts, we want to illustrate the kind of patterns that are detected by our algorithms. The following charts are of the stocks in the above list at the time the list was generated. Two sets of 9 charts each are displayed below instead of the 19 on the list simply because 18 fit better on the page. The names were omitted from the charts to provide more space for the chart and because the names are not really important.  There are all kinds of great setups here.  We have not drawn lines to help you see them, but you would almost have to be blind not to see the cup and handle formations, new highs, consolidation-surge combinations, or breakouts through resistance among these charts.  The scan picks up other interesting patterns, including the inverted head and shoulders pattern.  Most of these patterns can be extremely good vehicles for profit. 

Below are three charts that illustrate the "breakout" patterns this scanner can detect.  These stocks were found on a more recent scan than the scan that found the above stocks.  On any given scan date, there may not be any stocks that fit a specific looked-for pattern (even though we scan thousands).   Remember that the purpose of a scanner is to save time.  To find all the stocks that have had a breakout, for example, would be an overwhelming task without using a search algorithm.  However, the scanner cannot find a pattern that does not exist in the market at the time.  Another point worth mentioning is that algorithms are mathematical equations.  They cannot "see" nuances that are obvious to a human.  Two patterns may look the same to a human, but the algorithm may find one and not the other.  This can happen because the missed stock falls just outsided the parameters of the algorithm.  The algorithms have been tested and refined so that they represent a good compromise in the search variables.  For example, changing a single variable a little may permit the detection of another attractive stock but allow far too many others through the screen that are not attractive at all.  No algorithm is perfect. 

The first chart below shows a breakout after a period of consolidation.  The algorithm was looking at closing prices rather than highs.  Look at the last three candlesticks in the chart.  The algorithm would detect this stock on any of the last three days because on those days the closing price was above the highest closing price during the previous 30 market days or more (at least 1½ months or six market weeks).  At the same time, volume surged 20% or more above its average volume for the previous 10 days.  The breakout algorithm in this scanner also has a component that requires the stock to be in a trading range with an upper and lower boundary (as illustrated).   The light curvy lines in the chart are Bollinger bands.

All three of these charts were found on the same day.  There were others as well.  Below is a stock that remained in a narrow trading range for 58 days before breaking out.  Volume surged on the breakout.  The scanner would detect the stock on either of the last two days.  

Note the little red arrow above the upper blue horizontal line.  That appears to be a false breakout because the closing price is above the highest closing price during the previous 30 trading days.  However, this stock would not have appeared on the scanner's list because the volume did not surge on that day.  If volume had surged, it would be an example of a false breakout.  False breakouts can happen.  If the volume had surged, the scanner would have listed this stock that day whether it used closing prices or highs.  If we were to change the algorithm so that it requires a greater penetration of the upper boundary, false breakouts would still occur.  They can be identified only by hindsight.  Think about stop losses for a moment.  No matter where you put them, you will still have a few stops triggered just before a rebound.  Breakout signals are like that.  No matter how you define a breakout, there will occasionally be false signals.  Of course, you could require additional filters.  For example, on noting the appearance of a stock on our breakout list you could require it to push through the overhead resistance a little further, require that the breakout condition continue for two or more days, or require the satisfaction of some other screening condition before considering it to be a purchase candidate.  Another option is that you could wait to see if the next surge after the pullback results in a true breakout.  All we can do is note that the breakout has occurred.  In this particular case, no signal was given on the day marked by the red arrow.  On the following day, volume did surge but the stock had already closed lower.  The volume surge requirement prevented a false signal.

The following chart shows a stock that had previously been higher, plunged, consolidated, and then had a breakout with an increase in volume.  The Bollinger bands were in a "squeeze" when the breakout occurred.  The algorithm is designed in such a way that it will keep listing a stock that has had a "breakout" until a pullback occurs.  Some traders who miss an initial breakout prefer to buy after a pullback and purchase if there is a confirmation of the original breakout.  The continued reporting helps such traders remain updated about the stock's progress.  However, as soon as the pullback begins, the stock will cease to be listed in the reports because it will no longer satisfy the breakout filtering conditions looked for by the algorithm.  The stock will not appear on the list again until its closing price exceeds the closing high reached before the pullback (confirming that the previous breakout has "legs"). 

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