I did some investigation looking for a filter that might give us an up day on the following day if we bought its outputs for an overnight relationship and I found one - maybe.
I say maybe because I don't want folks rushing off trying to get some free money in what I'm considering a down trending market. So when I give this to you - for the sake of your trading account be careful -
It is, of course, a derivation of the BOB set-up filter - but it has a twist - to give it some oomph I've added a modified ATR/RSI filter and one additional requirement - that the second day of the the BOB set-up volume be greater than the average volume. Here is the filter -
/*This filter is to be run late in the day to find potential overnight trades*/
show stocks where close is between 15 and 35
and average volume(90) > 500000
and volume > average volume(90)
and close 1 day ago < ema(8) 1 day ago
and close 1 day ago < open 1 day ago
and close < open
and high < high 1 day ago
and volume is more than 20% > volume 1 day ago
and low < low 1 day ago
and average true range(10) < cma(average true range(10),10)
and rsi(2) < 5
Note the change in the RSI to a requirement to be less than 5 instead of 2.
Here are some results -
Yes those are all of the selections (there were none Thursday) and yes they were all positive the next day. Now if you lose your butt playing overnight don't blame me.
Keep in mind that if the stock gaps down on you it is possible that it will come back but if it keeps going your best approach is to get out. On a hard gap down no stop loss order is going to save your money. It's gone.
This is a very dangerous play - be very careful if you try it.
This filter tests poorly in the current market so I wouldn't hold these stocks very long. It tests just fine in an uptrending market (figure that).