Ceiling Bumpers
These are stocks that are close to the resistance of a high of a certain
period, and, hopefully, they are bumping against that resistance and consolidating
healthily for a while, getting ready for a breakout.
The Cup-With-Handle stocks exhibit this behavior, but
their selection is quite specialized. The Ceiling Bumpers are stocks that
are close to their highs but do not satisfy all the criteria necessary to
become Cups-With-Handle stocks, for a variety of reasons. However, they may
still be worth a look. For example, you may find stocks that are in a long
flat sideways base in these screens.
The most important resistance level is the 52-week high, but 6-month
and 3-month screens are also provided for stocks that might make a pop
if the consolidation is healthy.
Stocks that appear in the 6-Month list are only there
if their old 6-Month High is different from their 52-Week High in order
to prevent duplication. The same is true for the 3-Month table (3-Month High
is different from both 52-Week and/or 6-Month). If the same stock appears in all
three screens, then it is most likely bumping against a downward trendline,
hopefully ready for a breakout above that line.
The ADX Value of a stock is also taken into account
before adding it to these screens. Only stocks with an ADX Value of 30 or less
are included. This is because a stock has more of a chance of success if it
is consolidating sideways or slightly downward just before it bursts to new highs.
Stocks in these screens are sorted in descending order by the number of
weeks it has been since they had experienced the old high, so the stocks
at the top of the tables have been basing the longest.
Stocks in the Ceiling Bumper screens must satisfy the following requirements:
- Closing price is no more than 15% away from the period high
- The consolidation must be at least 4 weeks old (effective Apr21,2003: 2 weeks old)
- Lowest ADX Value seen during the week is no more than 30
- MACD is bullish (above the zero line)
As mentioned in the Cups-With-Handle section, you want
to buy a Ceiling Bumper stock as it pierces through the resistance, looking
for volume that is at least 50% above average.
Stocks that break out to new highs during the week will be reflected in our
Ceiling Bursters screens.
See Ceiling Bumpers tables from several weeks ago.
CURE more than doubled from its Sep2001 lows and moved in a general sideways, slightly
downsloping fashion with declining volume until the end of the year, showing up
on the Ceiling Bumpers screen during the second half of December. On Jan04, it
surged ahead 9.4% on 6 times its average volume and continued on
for an advance of over 53% in less than 3 weeks.
BEFORE
(As Of Jan03,2002)
Bumping against a 7-week-old high
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AFTER
(As of Jan23,2002)
It advanced over 53% in less than 3 weeks
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