David Ryan’s Ants

David Ryan's Ants

Institutions are the driving force that move stocks into becoming big winners.

What separates stocks that will stall after making a 15-20% move, compared to others that will gain 20%, build a base, and then keep going higher?

This is the question David Ryan asked himself when developing the Ants Indicator to help identify potential leading stocks with institutional demand.

Who Is David Ryan?

David Ryan is best known for his work at the William O'Neil and Company, and Investors Business Daily.

David also won the U.S. Investing Championship in 1985, 1986, and 1987 with a triple-digit gain in each year. The total gain during the three years of the competition was 1,379%.

During his stay at the William O'Neil and Company, David shared his research and discoveries while uncovering what makes a stock truly exceptional.

The Ants indicator was developed when David began to wonder what made stocks continue moving higher after they were already extended while others only had moderate moves higher.

The CANSLIM style of trading blends fundamentals in addition to technical analysis. Any stock traded with this methodology should have growing earnings and sales, in addition to supportive price action.

Ants Indicator Definition

In the past 15 days the Ants Indicator appears when you see:

  • 20-25% increase in price
  • 20-25% increase in volume
  • 12 out of the past 15 days are up

The overwhelming increase in price and volume in a short time span represents that there is large institutional accumulation in the stock.

Institutions can't just buy a full position in a day or two as they manage huge amounts of money. Instead, they will take multiple days to weeks to enter a stock.

When David Ryan discovered this kind of strength, he would put a dot on the top of the price bar. As the dots amassed they began to look like ants on the chart.

Charts With Ants Are Top Performers

Seeing David Ryan's Ants indicator appear on the charts is a tool to help you focus on super-performing stocks. Closely monitor a stock when it shows a large increase in price with an accompanying increase in volume.

Once you notice this kind of strength on a chart, keep the stock on a watchlist and wait for a new setup to emerge.

As the company continues to post exceptional earnings and sales, institutions will continue accumulating shares. Remember, large funds take months to establish their full positions.

Over time a new base will form and the price will tighten. After a previous move has had time to consolidate its gain, be on the lookout for a new tradable range to develop.

Example 1: UBER

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UBER showed a huge price advance off its lows and broke out of a traditional base. When the Ants indicator appeared on the chart, it signaled that this stock is a potential super performer.

Following a consolidation in price, a new base evolved. Over the course of two months, the price eventually tightened and provided a tradable pivot.

Example 2: MSTR

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After MSTR broke out of a traditional base, we saw the Ants indicator appear. Notice how it took a couple of weeks for the price to consolidate, tighten, and then provide another tradable range.

Remember the Ants indicator was created by David to spot potential super performance stocks that have potential to double after Ants show on the charts.

More tradable areas developed over time as the stock saw tight price action. We see the Ants indicator appear after a move up and are waiting for an area to manage risk against.

Ants Indicator In Deepvue

Deepvue offers multiple ways to find stocks that display the Ants criteria.

On The Charts – Technical Pattern Indicator

To see the Ants indicator on your charts, add the Deepvue Technical Patterns indicator.

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In the indicator settings, select Ants and uncheck all other unwanted indicators.

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On the Style tab, you can choose how you want the indicator to appear. Choose from various shapes, colors, and if you want the indicator to appear above or below the candle.

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Screening For Ants

Find stocks with the Ants criteria by adding it to any of your screens.

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When editing your screener, you can simply type ants into the search bar. Navigate to the Technical Patterns and click “yes” once Ants is selected.

Combine the Ants Technical Pattern with your favorite fundamental or liquidity screens.

Key Takeaway

The Ants indicator identifies stocks with strong institutional accumulation by focusing on large price gains with an increase in volume.

Use the Ants indicator to focus on institutional quality stocks that are under heavy accumulation and have the potential to double once Ants show up on the charts.

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