5/18 Top Prospects

Three breakouts beyond the 55-day price channel among the 300+ stocks and exchange trade funds I screened.

sym	phase	adx	bday	blevel	stop	atr	atr%
DELL		30	may18	$16.80	$16.30	0.50	3.0%
HPQ		27	may17	$37.60	$38.55	0.95	2.5%
KBH		21	may17	$10.94	$11.31	0.37	3.4%

Exchange-traded funds are marked with a plus sign (+) after the ticker symbol. My holdings are marked with an asterisk (*).

DELL broke above the price channel on an earnings announcement gap. I’ve listed it, but it doesn’t count as a new breakout, since the stock went into bull phase on Feb. 16 and despite a severe retreat, has remained in bull phase ever since.

YUM broke above the price channel, but with a slightly declining average directional index (adx), invalidating the phase change.



Key

• phase: Green for a bull-phase breakout, red for a bear phase.
• adx: Average direction index location, indicating the strength, or the temperature, of the trend. Orange for 40 or greater, aqua (light blue) for 30 and up but below 40, magenta (light purple) for 20 and up but below 30, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, purple for sunset on the horizon and brown for the earth.)
• bday: Breakout day, the day the price broke through the upper or lower 55-day price line.
• blevel: Breakout level, the price level of the line that was broken through.
• bstop: The stop/loss price calculated on breakout days as the 14-day average true range below the breakout-day low for a bull phase and above thre breakout-day high for a bear phase.
• atr: The 14-day average true range, in the same currency as the price.
• atr%: The average true range as a percentage of the breakout level, an indicator of volatility that is comparable for all potential trades.

About channel analysis

Read a detailed explanation of my channel analysis method, including trading rules.