Immediately after writing the comment above, I sat down and examined all 44 charts in detail. My approach was pretty similar to what you outlined. Here’s how I proceeded. In Step 1 I eliminated 27 of the 44 by ruling those where the current price was 8% or more below the 50/200 dma.

I eliminated 8 more by getting rid of theose that did not have strong prior uptrends before the top, that had traded “sideways” for over a year, that had already fallen 40-50% since the peak, or that had not yet topped.

It didn’t take long to reduce the list to 9 which I looked at in more detail. The trick, as you mention, is to have some clear criteria that spell “NO, thank you” and to eliminate many charts on the basis of their not meeting these criteria.

Of the nine that remained, 4 or 5 really stood out, one being PFG and the others being ING, DECK, CVG, and WG. I am sure with a little more practice, I can get the number down even more and do so in less time.

There is simply no other way to pick out the worst from the rest.

But to make it easier–look for a weak close, an intraday reversal, a failure at either 50/200 DMA. ANY stock that doesn’t touch or is not near the 50/200 DMA can automatically be eliminated. So really out of the 44 only half are eligible based on the short needing to be right near the 50 DMA.

But really there is only one way: time. And I think some people have a talent for this unlike others because I was seeing what I needed to see pretty quickly back in High School. I would say by the time I was out of HS, I knew difference between good and bad cup w/ handle. So it is just time…combined with some natural talent. But mostly it is just a byproduct of time.

As a way of developing my skill at chart reading, I’ve started to write up an analysis BEFORE I read yours. The goal is to see if I can identify the same features of the chart that you highlight.

While I’m getting a little better at this each week, I realize that there is still another, more important step: to know how you picked those charts from the dozens (or hundreds) that you examined.

Here’s a specific example: the one and only new short for today, PFG, is is one of 44 in the most recent “Daily Volume Surge” scan.
As I look through those 44 charts, I do not feel confident that I could pick out the PFG as the best of the bunch.

I, for one, would find it very helpful any information on the steps you use to narrow down a list of charts to a smaller set of candidates.
In the meantime, I’ll continue to practice.