Introduction: Identify Short-Term Trading Opportunities with EquityScan's Oversold Stock Screen
This guide will show you how to use EquityScan to quickly identify "oversold" stocks – stocks that have experienced a recent, sharp decline in price and may be poised for a short-term rebound. This is our preferred scan for short-term trading opportunities, but remember that you can always customize the parameters to match your own unique strategy and risk tolerance.
Important Considerations:
Do your homework! While technical indicators like the RSI can be helpful, they should never be the sole basis for your trading decisions. Always conduct thorough fundamental research on any stock before investing. This includes analyzing the company's financial health, its competitive landscape, and its future growth prospects.
Earnings announcements are key. Be sure to check the "Next Earnings Date" in the EquityScan detailed view. Earnings reports can significantly impact a stock's price, so it's generally best to avoid trading within one week of a scheduled announcement.
By combining the power of EquityScan with your own due diligence, you can increase your chances of success in the fast-paced world of short-term trading.
Let's get started!
EquityScan Homepage
14 day RSI Filter
Enter Oversold filter criteria
Filter Results
Sort by Upside Potential
Further Sort by Upside: To view stocks with the highest potential upside, click the 'Upside Potential' column header. Want more control? Use the filter icon to specify a minimum upside percentage (e.g., 10%) and refine your results.
Stock Detailed View
Click on the ‘Stock name’ to get to the stock detail page.
Technical Research
Access advanced charts and technical analysis tools via TradingView (free account allows for two indicators). If you prefer a different charting platform, feel free to use your own charting platform.
Before you proceed, consider these trend checks:
200-Day Moving Average: Is the stock price currently above its 200-day moving average? If not, the longer-term trend may be downward, so proceed with caution or consider other opportunities.
Short-Term Downtrend: Is the stock in a short-term downtrend? If so, add it to your watchlist and wait for the downtrend to reverse before considering an entry. This helps avoid catching a falling knife!
If the stock passes both checks, it's time to move on to more in-depth research.
Fundamental Research
Before you trade, do your homework!
Newsflow: Scan for any recent news that could significantly impact the stock's price. For example, natural disasters, regulatory changes, or industry disruptions can create uncertainty and volatility.
Earnings: Always check the next earnings announcement date. It's generally best to avoid trading a stock within one week of its earnings release, as the results can cause significant price swings.
Fundamentals: Conduct your own research on the company's financial health and future prospects. Review key metrics, analyze their competitive landscape, and assess their long-term growth potential.
Buy Signals & Sell Prices
Entering the Trade: Look for stocks where the RSI has just crossed above 30. Confirm the signal by observing the RSI on the following day.
Taking Profits: Set a clear profit target and exit the trade when it's reached. Consider using resistance levels as potential selling points.
Limiting Losses: Protect your investment by setting stop-loss orders. This will automatically exit the trade if the stock price drops to a predetermined level.
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