CHICAGO, May 22, 2014 /PRNewswire/ -- Stocks in this week's article include: AmTrust Financial (NASDAQ: AFSI – Free Report), Allied World Assurance (NYSE: AWH – Free Report), Chatham Lodging Trust (NYSE: CLDT – Free Report), Federated National Holding Co. (NASDAQ: FNHC – Free Report) and WhiteWave Foods (NYSE: WWAV – Free Report). Kevin Matras shows how to use weekly price and volume to help determine future market direction and spot institutional buying.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
With the market making new all-time highs last week, but then quickly retreating, it can be difficult to determine which stocks are poised to move higher and which ones are just marking time before heading lower. One of the best ways to determine this is to look at the volume; specifically, how the price and volume move together.
I mention this because price typically follows volume. So in this week's screen I want to focus on stocks with increasing Price and Volume.
One of the reasons why I like to look at increasing volume is because it's one of the best ways to spot institutional buying. This is important because regular, everyday investors do not have the power to move the market or to make a noticeable blip on the volume's bar chart. But big institutional traders do. And nothing can move a market more than seeing these guys pile in.
When you hear someone say the market was up or down on big volume, that's more than just an interesting fact. To the technically savvy, that can act as a clue to investor sentiment and a chance to get in and ride the wave while the big guys are getting in.
So in this week's screen I'm searching for stocks with increasing volume over the last couple of weeks. Not just a couple of days, but weeks. This helps me see true demand that seems to be building over time. There may be an occasional light day here and there, but in total, I want to see it growing week by week.
And while there are plenty of stocks that fail to meet these criteria right now, there are lots of really great stocks that do, and those are the ones we're concentrating on.
The parameters to the screen I'm running this week are as follows…
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