Tim Bovee, Private Trader: Tuesday's Finalists

Tuesday, January 6, 2015

Tuesday's Finalists

The three symbols that survived early analysis -- GOLD with a bull signal and COG and HLSS with bear signals -- confirmed those signals on Tuesday as they continued to trade beyond their 20-day price channels.

However, their options grids don't meet my requirements. I found open interest on GOLD to be too low, and COG and HLSS to have overly wide front-month, at-the-money bid/ask spreads.

(See "Tuesday's Prospects" for a description of the early rounds of analysis.)

I've passed on all three for those reasons and shall open no new positions based on Monday's market session.

Even had they not been rejected on options grid grounds, each has an earnings announcement coming up in February, which will provide far better opportunities for trading.

Three symbols had sufficient liquidity for volatility plays keyed to earnings. One, SD, is priced at around $2, a low level that never provides useable options grids.

The other two, MU and MON, were solid going into the final analysis and survived to the end. I've opened positions in both. (See "MU, MON: Volatility plays".)

-- Tim Bovee, Portland, Oregon, Jan. 6, 2015

References

My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules can be read here.

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Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.