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Jeff Cooper's Expansion PivotsTM

This is another great stock selection system by Jeff Cooper.

Basically he noted that when a stock trades about its 50-day moving average, it will suddenly move to the upside or downside. He attributes these moves to money managers that are attracted to stocks using the 50-day moving average as either a support or resistance level.

Setup for Longs

  • Today's range (absolute value of H-L or of the ATR) is greater than the daily range of the past 9 days.
  • Either today or yesterday, the stock was trading at or below the 50DMA and moves higher
  • Tomorrow, buy stop .1 above today's high
  • Stop, 1 point below yesterday's low

Setup for Shorts

  • Today's range (absolute value of H-L or of the ATR) is greater than the daily range of the past 9 days.
  • Either today or yesterday, the stock was trading at or above the 50DMA and moves higher
  • Tomorrow, sell stop .1 below today's low
  • Stop, 1 point above yesterday's high

To read more about this method, I recommend Jeff Cooper's Hit And Run Trading

For those using Metastock, below is the code for the stock selection.

Expansion Pivots Buy

A:=Close
B:{Breakout}(H-L)>ATR(9)
C:{Signal}Ref(C,-2)<=Mov(C,50,S) and
Ref(C,-1)>Mov(C,50,S) OR Ref(C,-1)<=Mov(C,50,S) and
C>Mov(C,50,S)
D:{entry}HHV(H,2)+.125
E:{Stop}If(Ref(C,-2)<=Mov(C,50,S) and
Ref(C,-1)>Mov(C,50,S),Ref(C,-1)-1,If(Ref(C,-1)<=Mov(C,50,S)
and C>Mov(C,50,S),C-1,0))
Filter:ColB and ColC


Expansion Pivots Sell

A:=Close
B:{Breakout}(H-L)>ATR(9)
C:{Signal}Ref(C,-2)>=Mov(C,50,S) and
Ref(C,-1)<Mov(C,50,S) OR Ref(C,-1)>=Mov(C,50,S) and
C<Mov(C,50,S)
D:{entry}LLV(L,2)-.125
E:{Stop}If(Ref(C,-2)>=Mov(C,50,S) and
Ref(C,-1)<Mov(C,50,S),Ref(C,-1)-1,If(Ref(C,-1)>=Mov(C,50,S)
and C<Mov(C,50,S),C-1,0))
Filter:ColB and ColC


Source: Hit And Run Trading by Jeff Cooper
 

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