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Pullbacks scan

Sharp 5-Day Dip Screener

This scan finds stocks that dropped more than 5% over the last 5 trading days while staying above their 200-day moving average.

Run this scan in the live demoFree, no sign-up. The demo uses made-up sample data.

The exact rule

Type this in Chalni: down more than 5% in 5 days and close above 200 day sma

  1. Chg %(5) < -5
  2. Close > SMA(200)

Find US stocks where the 5-day change (%) is below -5; and the closing price is above the 200-day simple moving average.

Formula view
change_pct_over(5) < -5
AND close > sma(close, 200)
Example chart: Sharp 5-day dip in an uptrendDaily candles of a made-up sample stock with 200-day SMA. The shaded day is the day the scan fired.
  • 200-day SMA
  • Shaded day: the scan fired
Example from Chalni's made-up sample market, not a real stock. It shows the most recent time this scan fired in the sample US market, picked whether or not the trade worked.

What it means

A drop of 5% or more in one week is a sharp move for most large stocks. In a long-term uptrend, it can be profit-taking or a reaction to market news rather than a real change in the company.

The scan uses no indicator except the price change, so it is easy to understand and easy to check on any chart.

How traders use it

  • Check the news first: a dip on a broken story is different from a dip with the whole market.
  • Look for support below, such as the 50-day average or an old breakout level.
  • Add "rsi below 40" for a stricter pullback list.

Watch out for

  • A fall of more than 5% can also be the start of a bigger fall. Use a stop.
  • For very volatile stocks, a 5% week is normal. Try a bigger number for them.

Test it before you trust it

Every scan in Chalni sits an exam. First it runs on older data, the practice: each time it picks a stock, the stock is held for 10 trading days and 0.2% is paid in costs. Then it runs on newer data it has never seen, the exam. A scan that only works in practice has just memorised the past.

See the practice and exam results for this scan in the demo (on sample data; real data comes at launch).

Questions

Should I buy a stock after it drops 5%?

Not automatically. The drop is only a starting point. Check the reason, the trend and the support levels, and test the rule before you use it.

What does "above the 200-day average" add?

It keeps the scan to stocks that are still in a long-term uptrend, which are more likely to bounce than stocks in a downtrend.

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