Trend Strength Scanner

What It Detects

Stocks with:

• Multiple moving averages in perfect alignment
• Strong directional trend (up or down)
• Price above/below key moving averages
• Sustained momentum without overextension

The Formula

Copyc > sma(20) and sma(20) > sma(50) and sma(50) > sma(200) and roc(20) > 10

How It Works

1. c > sma(20) - Price above 20-day MA (short-term uptrend)
2. sma(20) > sma(50) - 20-day above 50-day (medium-term uptrend)
3. sma(50) > sma(200) - 50-day above 200-day (long-term uptrend)
4. roc(20) > 10 - 10%+ gain in 20 days (momentum confirmation)

This creates a "staircase" pattern with all MAs trending higher.

When to Use

Best for:

• Trend following strategies
• Swing trading (hold 2-8 weeks)
• Position trading (hold 2-6 months)
• Finding established momentum plays

Avoid when:

• Looking for reversal trades (this finds continuations)
• Need immediate entry (stocks often extended)
• Market in choppy sideways action
• Seeking quick day trades

Why Trend Alignment Matters

The "Staircase" Effect

When all moving averages align properly:

• Price > 20MA > 50MA > 200MA = All timeframes bullish
• Institutional money accumulating
• Retail following momentum
• Algo trend-following systems engaged
• Technical support layers stacked

What It Means

Strong uptrend:

• Minimal pullbacks
• Higher lows on consolidations
• Volume increases on rallies
• News often follows price (narrative justification)

Beware exhaustion:

• RSI > 70 for extended periods
• Vertical price spikes
• Gap-ups on no news
• Volume declining on new highs

Parameters You Can Tweak

Ultra-Strong Trend

Copyc > ema(10) and ema(10) > ema(20) and ema(20) > ema(50) and ema(50) > ema(200) and roc(20) > 15

• EMAs for faster reaction
• 15%+ move in 20 days (very strong)
• Catches explosive momentum stocks

Conservative Trend (Less Extended)

Copyc > sma(20) and sma(20) > sma(50) and sma(50) > sma(200) and roc(20) > 5 and roc(20) < 15

• 5-15% range (momentum without overextension)
• Better entry timing
• Lower risk of immediate pullback

Bearish Trend (Downtrend)

Copyc < sma(20) and sma(20) < sma(50) and sma(50) < sma(200) and roc(20) < -10

• Inverse alignment (downtrend)
• For shorting or avoiding
• All MAs acting as resistance

Trend + Volume

Copyc > sma(20) and sma(20) > sma(50) and sma(50) > sma(200) and v > sma(v, 50) * 1.2

• 20%+ above average volume
• Confirms institutional participation
• More sustainable trends

Large-Cap Only

Copyc > sma(20) and sma(20) > sma(50) and sma(50) > sma(200) and roc(20) > 10 and f.market_cap > 10B

• Blue-chip stocks only
• Smoother, more reliable trends
• Lower volatility

Example Columns to Add

CopyPrice: c
20MA: sma(20)
50MA: sma(50)
200MA: sma(200)
20-day %: roc(20)
52-week %: roc(252)
RSI: rsi(14)
ATR%: atrp(14)
Volume Ratio: v / sma(v, 50)

Entry Strategies

Pullback Entry (Conservative)

1. Scan finds strong trend
2. Wait for pullback to 20-day MA
3. Watch for bullish reversal candle
4. Enter when price bounces off 20-day MA
5. Stop below 50-day MA
6. Target: 10-20% or next resistance

Breakout Entry (Aggressive)

1. Scan finds trend near consolidation breakout
2. Enter on break of consolidation high
3. Volume confirms (1.5x+ average)
4. Stop below consolidation low
5. Trail stop below 20-day MA

Continuation Entry (Medium Risk)

1. Stock appears on scan
2. Check RSI not > 75 (avoid overextension)
3. Enter at current price
4. Stop below 20-day MA (tight)
5. Take partial profits at 10%, let rest run

Exit Strategies

Profit-Taking Signals:

• 20-day crosses below 50-day (momentum fading)
• RSI divergence (price higher, RSI lower)
• ATR spike + big gap (climax move)
• Hit predetermined target (15-25% typical)

Stop Loss Levels:

• Tight: Below 20-day MA (3-5% typical)
• Medium: Below 50-day MA (7-10% typical)
• Wide: Below 200-day MA (position trading)

Warning Signs:

• Volume declining on rallies
• Price struggling to make new highs
• 20-day MA flattening
• Sector weakness appearing

Trend Quality Assessment

High Quality Trend

• All MAs sloping upward (not flat)
• 20-MA separation from 50-MA > 5%
• 50-MA separation from 200-MA > 10%
• RSI between 50-70 (momentum without exhaustion)
• Volume increasing on up days
• Sector also in uptrend

Low Quality Trend

• Flat 200-day MA (no long-term direction)
• Small separation between MAs (< 2%)
• RSI > 75 extended (overbought)
• Volume declining
• Isolated move (sector weak)
• Recent parabolic spike

What to Watch For

Strong trend signals:

• First pullback to 20-MA after breakout
• Consolidation with tightening range
• Higher lows on each pullback
• Pre-market showing strength
• Sector rotation into this group

Warning signs:

• Gap-up on minor news (exhaustion)
• Multiple failed attempts at new high
• Increasing volatility
• Insider selling
• Sector starting to roll over

Common Mistakes

1. Chasing extended stocks - Wait for pullback if RSI > 70
2. No stop loss - Even strong trends reverse eventually
3. Ignoring market - Individual trends need market support
4. Holding through MA breakdown - Exit when 20 crosses below 50
5. Overleveraging - Strong trend ≠ risk-free trade
6. Buying parabolic moves - Vertical moves = exhaustion coming
7. Ignoring volume - Declining volume = trend losing steam

Combining with Other Indicators

Trend + RSI

Copyc > sma(20) and sma(20) > sma(50) and sma(50) > sma(200) and rsi(14) > 50 and rsi(14) < 70

RSI confirms momentum without overbought condition

Trend + MACD

Copyc > sma(20) and sma(20) > sma(50) and sma(50) > sma(200) and macd() > macd_signal() and macd_hist() > 0

MACD histogram positive = accelerating momentum

Trend + Bollinger Bands

Copyc > sma(20) and sma(20) > sma(50) and sma(50) > sma(200) and c > bb_lower(20, 2) and c < bb_upper(20, 2)

Price within bands = not overextended

Trend + ATR Filter

Copyc > sma(20) and sma(20) > sma(50) and sma(50) > sma(200) and atrp(14) > 1.5 and atrp(14) < 4

Moderate volatility = tradeable without excessive risk

Timeframe Considerations

Daily Charts (Standard)

• Hold 2-8 weeks
• Best for swing trading
• Use 20/50/200-day MAs

Weekly Charts (Long-term)

• Hold 3-12 months
• Best for position trading
• Use 10/20/40-week MAs
• Filters out daily noise

4-Hour Charts (Aggressive)

• Hold 3-10 days
• Intraday trend following
• Use 20/50/100 period MAs
• More signals but noisier

Market Context (Critical!)

Trade trend stocks when:

• SPY above 200-day MA
• SPY showing MA alignment too
• VIX < 25 (stable volatility)
• Sector rotation happening

Avoid trend trades when:

• SPY below 200-day MA (bear market)
• SPY MAs misaligned (choppy)
• VIX > 30 (high volatility breaks trends)
• Market breadth negative

Individual stock trends need market tailwind to work.

Sector Rotation Strategy

Trend strength often appears in waves by sector:

Early Bull Market:

• Technology
• Consumer Discretionary
• Financials

Mid Bull Market:

• Industrials
• Materials
• Real Estate

Late Bull Market:

• Energy
• Healthcare
• Utilities (defensive shift)

Run this scan on sector ETFs to identify rotation.

Position Management

Building Position

1. Enter 25% on trend confirmation
2. Add 25% on first successful pullback
3. Add 25% if breaks to new high
4. Keep 25% dry powder for deep pullback

Trailing Stops

• Aggressive: Trail below 20-day MA
• Conservative: Trail below 50-day MA
• Hybrid: Start at 50-MA, move to 20-MA after 15% gain

Profit Taking

• Take 25% at 10% gain
• Take 25% at 20% gain
• Let 50% run with trailing stop
• Respect technical breakdown (20x50 MA cross)

Related Strategies

• Golden Cross