Tuesday, April 5, 2011

4/5 Top Prospects

There are six new breakouts today, excluding those whose earnings will be released in the next 30 days. All are stocks; no currencies or exchange-traded funds.

In ranking potential trades, I give equal weight to volume, the strength of the trend and the recent volatility of the issue.

Using those criteria, I rank today's breakouts as follows:

3. RCL
4. TM
5. MA

sym phase adx bday blevel stop atr atr%
COST   18 apr5 $75.48 $74.35 1.13 1.5%
DNDN   19 apr4 $37.75 $36.56 1.19 3.2%
MA   21 apr5 $262.38 $259.40 5.53 2.1%
NFLX   31 apr5 $247.55 $240.48 7.07 2.9%
RCL   29 apr5 $40.26 $41.50 1.24 3.1%
TM   36 apr5 $77.36 $78.94 1.58 2.0%

  • 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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