Many stocks didn't make the cut because they had earnings announcements coming soon. The earnings congestion is worse than the Capital Beltway during rush hour.
Two stocks without looming earnings showed signals on the parabolic SAR, but they still don't make the grade. This illustrates that the Watchlist has standards every bit as tough as those of "Dancing with the Stars".
Here they are, and here's why not:
HPQ, bull, possible signal on news that the company had completed an aquisition. Also, in the past eight trading days, the psar has switched phases four times -- a triple whipsaw (a "tripwhip").
There are arguments to accepting the signal. The bull signal is with the the trend, and the adx is a strong 36. Although the macd lacks energy, the stochastic is well positioned above the 80-line. A tripwhip isn't necesarily disqualifying, but this one makes me nervous. So, I pass.
TLT, bull, low adx (18), counter-trend. Those are offset by the monthly dividend, but honestly, with TLT, it's not that great.
Financial consultant Leslie Masonson describes a strategy for actively trading exchange-traded funds.
Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic
About the glance: The colors indicate the state of each signal.
- trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
- adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
- psar, pps, macd: green for bull mode, red for bear
- sto: green for overbought, red for oversold, yellow for the neutral zone.
New to private trading? Here's a look at How to Become a Private Trader.
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