As the market continues its subtle upward trend, an increasing number of interesting stock chart patterns are surfacing. About three dozen stocks or so that will complete a 3 weeks tight pattern (or very close to it) this week. Several are backing and filling in their buy zones right now. A three-weeks-tight pattern is an alternative pivot point where you might consider adding to a position or initiating one, if you are looking to get into the stock. If you want to learn more, check out this article about the Three-Weeks-Tight Pattern from IBD.

I’ve built a screen in MarketSmith that looks for tight weekly closes to help me focus in on these stocks. It’s currently being shared in the MarketSmith community, so if you’d like to use it, just visit the Shared Screens page. The screen uses the % that price is up in the current week to find stocks with at least two weeks of tight closes. It yields about a hundred stocks, but if you screen against the Growth 250 instead of the entire database, you end up with 42 stocks with potential three weeks tight patterns.

If the market holds here today and tomorrow, this weekend’s research should yield many potential ideas. This is not a runaway bull market, but with a little patience and dialed down expectations-progress can be made. I would not recommend chasing any stock, since it will probably prove to be hazardous to your portfolio’s health. Who knows where we end up on December 31st? But for now the markets are acting in a mildly constructive manner.

Best Returns,

Scott O'Neil

President, MarketSmith Incorporated

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