Prices moves in a trend weather it’s up or down or sideways. This query helps you to identify the underlying trend in a stock.
First you need to open a chart and then insert this query from the MENU SCRIPT.
At the lower end of SCRIPT List Window you will find a tab named SCAN. Just click on that.
Once you click the scan tab a new window will appear in front of you. You need to fill the details here.
- 1. Select Folder Type: Under this you need to choose the timeframe. For example we have chosen the EOD timeframe.
- 2. Select Folder to scan: Choose the folder from the list where you want to scan the query. For example we have chosen the F&O folder.
- 3. Select compression: We need to select the data compression here. For example we have selected none. For EOD data you can choose from weekly or monthly timeframe.
- Click on SCAN tab shown in the bottom of the window.
Once you click on the SCAN a new widow will appear in front of you.
- 1. Close Below Lower Bollinger Band: To identify a downtrend.
- 2. Close Above Lower Bollinger Band: To identify an uptrend.
- 3. Consecutive NR7: To identify a sideways trend.
Select whichever you want to scan and then click on OK. For Example we have chosen the Query “Close Below Lower Bollinger Band.”
3. HOW TO INTERPRET
NR7: It is a term given to a day that has a range smallest of last 7 trading days including that day. Market goes through regular contraction and expansion cycle. Expanding range is followed by Contraction and vice-versa. So if we can identify the narrow range days, then it give us a step ahead to benefit from coming expansion. NR7 represents contraction and warn us that a range expansion may come. However the direction is unknown but we can assume that the large expansion may come in the direction of the trend.
BOLLINGER BANDS: Bollinger Bands reflect direction with the SMA and volatility with the upper/lower bands. As such, they can be used to determine if prices are relatively high or low. A move outside the bands is very significant. Technically, prices are relatively high when above the upper band and relatively low when below the lower band.
This query gives us a list of instrument from the folder we have selected to scan.
- At the top of the window we can see that Scan Query found 7 stocks where prices have closed below the lower band.
- Below are the names of stocks where prices have closed below the lower band with their last closing price and change in closing price compare to previous day.