Monday, February 28, 2011

2/28 Channels Update

New breakouts today, based on a scan of forex, indicators, sector exchange-traded funds, and -- too much fun! -- stocks with current volume (at around 2:30 p.m. Eastern) of 250,000 shares or more, trading at new yearly highs. (Yes, my bullish bias is showing -- I didn't scan the new yearly lows list. Maybe later this week.)

Bull Positions
symbdayblevelstopadx ≥40?2-day?
CNO feb28 $7.22 $7.00   x
EGY feb28 $8.12 $7.88   x
HMA feb28 $10.00 $9.90   x
HNR feb28 $13.92 $13.50   x
LPNT feb28 $38.77 $37.61   x
TRGT feb28 $27.97 $27.13   x

Bear Positions

The USD/CAD breakout contains some ambiguity. The price pierced the 55-day lower line on Feb. 25, but the average directional index was moving sideways, so it did not count as a valid breakthrough. The adx today turned up with the currency pair trading below the price channel, validating the breakout. I've chose to use today's breakout level in calculating the stop/loss. An alternative method would be the use the Feb. 25 figures: C$0.9815 for the breakout level and C$0.99702 for the stop.

symbdayblevelstopadx ≥40?2-day?
symbdayblevelstopadx ≥40?2-day?
USD/CAD feb28 C$0.97719 C$0.98554   x

  • 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.
  • stop: The current stop/loss price. Early in a bull or bear phase, this will be 5¢ below the low or above the high, respectively, on breakout day.
  • adx ≥ 40?: Marked with an "x" if the ADX is at 40 or above, the levels that require an exit if the adx turns down.
  • 2-day?: Marked with an "x" on the two days following breakout day. Under certain circumstances, if the price closes below the breakout level on both days, then the position must be exited.

About channel analysis

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

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 decision decisions for his or her own account, and take responsibility for the consequences.

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