Contraction Expansion, Narrow Range, Breakout
Prices move in a cycle of contraction and expansion. If we can identify a contraction then we may get a tradable move. This query helps you to do that.
We have given an option to scan the stocks where prices have made a NR7 pattern. For this purpose 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 NR7. 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.
- 4. Click on SCAN tab shown in the bottom of the window.
NR7 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.
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 12 stocks where a pattern of NR7 has been made.
- Below are the name of stocks where prices have made NR7 pattern with their last closing price and change in closing price compare to previous day.