5 ways you scan for Tight Stocks?

Find the "all things Tight" scanner inside

Jun 22, 2024

"All roads lead to ROME"

Last week I explained all things “Tightness”. (Article Link)

Today

I will explain the 5 different ways (i.e. variations) one can scan for Tightness.

Disclaimer: Nothing discussed in this article is a buy-sell recommendation.

Direct scanning for a Tight Range:

This is the simplest way to code for tightness.

All you need to do is define 2 variables:

Width of the Range in %.
Length of the range (number of Bars).

Let’s try to find all stocks in the CNX500 universe with a range of less than 4% in the last 7 days.

33 Stocks.

Narrow Range Bars:

A derivative of this system is the Narrow Range bars (NR): The narrowest range in the last X days.

The most commonly used are NR5 and NR7 i.e. Narrowest range bar in 5 and 7 days.

How many NR7 stocks are in the CNX500 universe today?

34 stocks

How many stocks are both Tight within 4% in the last 7 days and forming an NR7 candle?

Only 1.

FDC

Tight Close:

Another way to find tightness is to find stocks that have closed very near to each other.

This can be a daily or weekly close (or any other timeframe).

3-Week-Tight is a well-known Tight pattern popularised by William O’Neil and the Canslim fraternity. Quick Read (Link).

It is formed when a stock closes within 1.5% of the prior week's close for two straight weeks.

How many 3-Week-Tight stocks can you find in the CNX500 Universe right now?

8 stocks

Inside Bars:

This is another way to scan for Tight stocks.

An inside bar is a bar that is completely housed inside its previous bar (mother bar).

As such an inside bar in itself is not useful. But if the range of the mother bar is small, this would mean tightness.

Another scenario that would interest a tightness trader is if there is more than 1 inside bar housed inside a mother candle at the end of an uptrend.

How many 2-tandem Inside bars are in the market right now?

7 stocks that have 2 tandem inside bars

Carter Squeeze system:

This is my favorite.

This is a system that uses the stock’s Average True Range (ATR) and Bollinger Band Width (BBW) to determine its “Tightness”.

The exact system has some elaborate rules, but at its core, it is this:

The ratio of ATR: BBW is inversely proportional to “Tightness”.

A ratio of 2 or less is considered to be very tight.

And an expansion would generally follow.

How many stocks are squeezed very tight according to the Carter Sqeeze max right now?

3 Stocks.

You can relax this ratio to 2.5 or 3 to get more stocks. They will still be tight.

That’s all for today.

I am speaking in a 1-hour session “All things Tightness” where I explain everything about tightness and how to find these tight stocks. Furthermore, how to choose a great tight setup from a good one.

Time and Date: 10 AM, Sunday. 30th June.

Please book your seat right now. The first 100 seats are FREE:

If you want to learn:

How to leverage technical tools to build yourself a trading system that is both PERSONAL and consistently profitable, Homma Private Access (HPA) will help you achieve that.

Details below:

Join the Sakatas Homma TA masterclass for beginners:
A complete course containing 8 Hourly sessions. Once a year.
To register for the next live masterclass, please fill out this form.
Watch the 1st session of the Autumn 2023 masterclass.
To access the full 8 sessions, contact us via WhatsApp @ 9481506784

Homma Private Access membership:
HPA is a subscription-based educational service (on WhatsApp). Benefits include:
1. Daily Market Breadth, Momentum, Sector Rotation, and Relative Strength Update.
2. Access to all my scanners including the BBB (buy before breakouts) scanner, and the Homma Khela Hobe 2.0 scanner.
3. Access to my proprietary Breadth-Momentum-Relative Strength & Sector Rotation dashboards.
4. Access to my Trading view indicators: Homma Khela Hobe, Buy before Breakouts (BBB), Homma Endgame, etc.
5. Access to live Telegram alerts to Homma Khela Hobe, Homma Pullback, and TGP scanners.
6. HPA Weekly: Hourly weekend deep dives and Q&A.
7. 1-year access to The Technical Take premium.
8. Live alerts to high-risk-reward setups breaking out.
9. Live updates on my portfolio and the trading setup rationale.
10. Access to my high probability watchlist.