100 SMA Fake Breakdown Strategy Scanner
| Code | Price | sma100 | sma200 | 100 sma | Chart | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| IFCI | 75.94 | 75.84799194335938 | 65.64799499511719 | 75.85 | ||||||
| NAM-INDIA | 1159.0 | 1148.5526123046875 | 1020.72265625 | 1148.55 |
100 SMA Fake Breakdown Strategy Scanner
100 SMA Fake Breakdown Strategy is designed to spot situations where price briefly slips below the 100-period Simple Moving Average but fails to sustain the bearish move. When price regains strength after this temporary weakness, it may indicate that the breakdown was rejected.
The setup is combined with a broader moving-average trend filter: the 100 SMA must remain above the 200 SMA. This helps focus the scan on stocks where the medium-term trend structure is comparatively stronger.
Important: This scanner highlights potential bullish reversal setups. A qualifying stock should be evaluated further using price action, volume, market conditions and suitable risk controls before entering a trade.
Scanner Conditions
- Trend Structure: 100 SMA Above 200 SMA
100-period SMA must be positioned above the 200-period SMA. This condition helps identify stocks with a stronger intermediate trend structure. - Analysis Window: 25 Periods
The scanner reviews up to the most recent 25 candles to identify a temporary downside violation of the 100 SMA. - Maximum Breach: 3%
The price can move below the 100 SMA by a maximum of 3%. Keeping the penetration limited helps distinguish a potential rejection from a deeper bearish breakdown. - Maximum Failed Moves: 2
No more than two qualifying fake breakdown events are permitted within the selected lookback period. This avoids setups with excessive back-and-forth movement around the moving average. - Maximum Breakdown Length: 3 Periods
A qualifying move below the 100 SMA can remain in the breakdown phase for up to three periods. The objective is to identify relatively short-lived weakness rather than prolonged bearish trends. - Recent Breach: Within the Last 3 Periods
The qualifying move below the 100 SMA must have occurred recently. This keeps the scanner focused on stocks where the rejection is still relevant to the current price action. - Current Price Proximity: Within 3%
The latest closing price should remain within 3% of the 100 SMA. This indicates that price has not moved excessively far away from the moving-average area after the failed breakdown.
Role of the 100 SMA
100 SMA acts as a medium-term reference point for price behaviour. Unlike a very short-term moving average, it responds more gradually to price changes and can provide a broader view of the prevailing market structure.
When price moves beneath the 100 SMA and quickly recovers, traders can watch whether the moving average is being reclaimed or whether the breakdown develops into a sustained bearish move.
This screener is useful for positional traders looking to identify failed breakdowns and potential recovery opportunities near the 100 SMA.- Intermediate Trend Reference: The 100 SMA helps evaluate the stock's medium-term price structure.
- Dynamic Market Level: Because the average moves with price, it can serve as a changing area of support or resistance.
- Failed Weakness: A brief move underneath the average followed by stabilization can signal that downside momentum is losing conviction.
Why Compare 100 SMA With 200 SMA?
The relationship between the 100 SMA and 200 SMA provides an additional trend filter for the scanner. When the 100 SMA is positioned above the 200 SMA, the stock is showing a relatively stronger medium-to-long-term structure.
This filter helps separate potential bullish recovery setups from stocks that are already trading within a weaker broader trend.
- Trend Alignment: A 100 SMA above the 200 SMA indicates that the shorter of these two medium-term averages is maintaining a stronger position.
- Setup Quality: The fake breakdown is evaluated within a generally stronger moving-average structure.
- Reduced Noise: The dual-average condition can help filter out some setups occurring in clearly weak trends.
Entry
The scanner identifies a potential failed breakdown, but an entry can be considered only after price demonstrates recovery from the temporary weakness.
- Recovery Entry: Look for price to regain strength after the temporary move below the 100 SMA.
- 100 SMA Reclaim: A convincing close back above the 100 SMA can provide additional evidence that the breakdown has failed.
- Breakout Confirmation: Traders may wait for price to move above the high of the recovery candle before considering a long position.
- Participation Check: Stronger-than-usual volume during the recovery can add confidence to the price reversal.
Stop Loss
The invalidation point can be linked to the low formed during the temporary move beneath the 100 SMA. If price breaks down again and moves decisively below that level, the original failed-breakdown thesis may no longer be valid.
- Protective Stop: A stop can be positioned below the low of the breakdown or recovery setup.
- Risk-Based Position Size: Determine the maximum acceptable loss before entering and adjust the position size accordingly.
- Dynamic Protection: Once the trade progresses favourably, the stop can be adjusted below important swing lows or another suitable technical reference.
Target
Profit objectives can be established using the nearby chart structure rather than relying on the moving average alone. Previous highs, resistance zones and expected risk-reward can help define potential exit areas.
- First Objective: The previous swing high or nearby resistance zone can serve as an initial profit area.
- Extended Move: If momentum remains strong, the next significant resistance level can be considered for a further target.
- Risk-Reward Assessment: Prefer setups where the potential upside reasonably compensates for the predefined downside risk, such as 1:2 or better where the chart structure allows.
How the Fake Breakdown Setup Works
A typical setup begins with price slipping beneath the 100 SMA. Instead of continuing lower, the stock stabilizes within a limited distance from the moving average and begins recovering. The scanner is designed to identify this behaviour while also requiring the broader 100 SMA versus 200 SMA relationship to remain favourable.
The combination of a recent shallow breach, limited time below the average, and price remaining close to the 100 SMA helps focus the scan on potential failed bearish moves rather than prolonged breakdowns.
TSR Custom Screener
TSR Custom Screener can be used to scan stocks that satisfy these conditions, reducing the need to manually inspect every chart.
Important Note
A temporary move below the 100 SMA does not automatically mean that price will reverse. Treat the screener as a starting point for analysis and evaluate trend structure, volume, support and resistance, confirmation candles and risk before taking any trade.
Fine Tune : You can customise these screeners by clicking on 'Fine Tune Filter' Option
Caution : All these screeners are crafted based on some historical scenarios which may / may notbe applicable here. We recommend to fine tune them according to current market conditions or seek expert advise before taking any decision.