Tuesday, November 16, 2010

URBN Watch

The earnings driven bull play on Urban Outfitters Inc. (URBN) that I entered Monday just hours before the announcement proved to be a good gamble.

URBN came through with a 1¢ earnings surprise, followed by a 4.6% gap up and an intra-day rise that touched 11% above Monday's close.

In my analysis on Monday, I ran through weaknesses in URBN's chart and concluded, "The decision on this play is far less clear-cut than I would like. That doesn't mean a bull position is out of the question. It simply means that when in doubt, use position sizing and option hedges to quantify the risk."

That turned out to be the right decision.

Will it always turn out that way? One can hope, but not a chance.

Tim Bovee, Private Trader tracks the 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 decision decisions for his or her own account, and take responsibility for the consequences.

  • h-a trend - Heikin-Ashi trend.
  • obv - On-Balance Volume.
  • pps - Person's Proprietary Signal.
  • psar - Parabolic Stop and Reverse
  • ma20 - 20-day moving average
  • ma50 - 50-day moving average
  • ma200 - 200-day moving average
  • macd - Moving Average Convergence-Divergence

About the glance: The colors indicate the state of each signal.
  • Signal Section:
    • pps, psar, macd: green for bull mode, red for bear.
  • Confirmation Section:
    • obv: green for uptrending, red for downtrending.
    • h-a trend: green for uptrending, red for downtrending.
  • Environment Section:
    • ma20, ma50, ma200: green for above the average, red for below the average.

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