Historical Support — near_support signal
The historical support signal (internal near_support) is one of Cash Scanner's most powerful: it combines three independent conditions to identify an asset near a statistically favorable buy zone. Unlike momentum oscillators that measure pace, historical support measures a location in the long price cycle.
Definition and composition
The signal triggers when all three conditions are simultaneously met:
AND (price below lower Bollinger)
AND (RSI or stochastic in oversold zone)
The "near" threshold on the 52-week low is configurable, default ±5%. Bollinger Bands are computed with standard configuration (20 periods, 2 standard deviations). Oversold confirmation requires RSI < 35 OR Stochastic < 25 — one of the two suffices.
Why this confluence is powerful
The logic of each component
- 52-week low — collective memory zone. Many investors watch this level; buy orders accumulate nearby. A test of this zone statistically produces a technical rebound, independent of fundamental analysis.
- Lower Bollinger — statistical deviation. Breaking below the lower band (2σ) means price has dropped unusually relative to its recent volatility. Mean reversion likely.
- Oversold confirmation — seller exhaustion. RSI or stochastic in low zone confirms the drop is advanced, not nascent. Reduces the risk of continuing lower without rebound.
- Taken together — each condition in isolation gives frequent false signals; the triple confluence drastically raises the probability of an exploitable technical rebound.
- Fundamentals independence — this signal says nothing about company quality; it identifies a technical timing opportunity, to be validated by other factors (sector momentum, earnings, fundamentals).
Typical case vs value trap pitfall
The near_support signal performs well on stocks in technical correction within a healthy long trend. It fails systematically in two contexts:
- Value trap: a stock whose fundamentals deteriorate (collapsing revenue, exploding debt, dilution). Last year's "support" becomes the ceiling of the new bearish regime.
- Structural bear market: in a broad bear market (broad ADX > 25 bearish), supports cascade. The isolated signal has no value without macro validation.
How Cash Scanner uses near_support
This signal enters the /100 score with significant weight, but its reading varies by mode:
- Phoenix mode:
near_supportis a major entry signal. It represents the classic signature of an early technical rebound and is one of the main contributors to a high Phoenix score. - Momentum mode: this signal is not valued by default. Momentum seeks bullish continuation, not bottom reversal. It can even be penalizing if the stock is technically broken.
- Dashboard badge: a stock that triggers
near_supportdisplays a visible badge in the opportunities table. Clicking it filters only active supports.
Limits and common pitfalls
- Moving 52-week low: on a stock in sustained decline, the 52w low slides each day. The signal may light up then fade without effective rebound.
- Bollinger avoid on gaps: a violent gap-open breakout can push price below the band without a real reversal zone. Prefer confirmation at close.
- Persistent oversold: RSI < 30 or Stoch < 20 can last several weeks in a bear leg. The signal alone doesn't say WHEN the rebound will happen.
- Combine with divergences:
near_support+ bullish divergence (RSI or Williams %R) confluence doubles signal quality. See divergences guide.