6/28 Top Prospects

For the second day in a row, no breakouts beyond the 55-day price channel among the 600+ stocks and exchange trade funds I screened, as part of my normal universe.

Maybe we're all holding our breaths waiting for the Greeks to melt down, maybe white-knuckle fear as the Republicans play chicken with the global economy, maybe it's the cyclical fact that the earnings season is ramping up.

Whichever, what the charts show is prices in the main pulling back from the extremes of their 55-day channels and wallowing around, like a herd of hippopotami, in mud of mid-stream.

OK. Time to break rules, lest I shrivel away from boredom as I sit in front of my trading terminals at the Private Trader Power Control Station.

Below are three stocks of interest that I arrived at through back-channels -- rather than looking at charts and then checking financials, analysts and other non-technical factors, I reversed the process -- liked the fundamentals a lot and then went to the charts.

Strong-trend Breakouts

sym	phase	adx	bday	blevel	stop	atr	atr%
AVEO*		28	jun28	$20.13	$19.26	0.87	4.3%
KKD*		49	jun27	$9.47	$9.02	0.45	4.8%

Exchange-traded funds are marked with a plus sign (+) after the ticker symbol. My holdings are marked with an asterisk (*).

Weak-trend Breakouts

sym	phase	adx	bday	blevel	stop	atr	atr%
LULU		23	jun21	$102.83	$98.93	3.90	3.8%

Exchange-traded funds are marked with a plus sign (+) after the ticker symbol. My holdings are marked with an asterisk (*).



Key

• 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 25 and up but below 40, magenta (light purple) for 20 and up but below 25, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, magenta 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.

The trader’s greatest sin is inaction. Sleeper, awake! Seize the Nietzchean moment. Roll out of bed and trade.