Wednesday, April 13, 2011

4/13 Top Prospects

One breakout today that meets my trading rules: An exchange-traded fund tracking the market in Thailand. My scan universe was high-volume stocks having penny increment options (down the list to around AMZN), foreign exchange-traded funds and Goldman-Sachs projected winners for the year.

I found four break-outs that are disallowed under my rules because they are within 30 days of the earnings announcement. They are KFT, MS, RTN and STX.

sym phase adx bday blevel stop atr atr%
THD+   33 apr13 $69.66 $68.69 0.97 1.4%
Exchange-traded funds are marked with a plus sign (+) after the ticker symbol. My holdings are marked with an asterisk (*).

  • 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.

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