Thursday, June 30, 2011

6/30 Top Prospects

Four breakouts beyond the 55-day price channel among the 600+ stocks and exchange traded funds I screened. Three of them have strong trends.

Overall, there's a lot happening to dampen trending in the markets. The three-day Fourth of July holiday weekend is coming up, earnings season kicks off on July 11 with Alcoa (AA), everyone is waiting for Greece to either melt down or survive, everyone is waiting for the U.S. credit rating to melt down or survive, la NiƱa is bringing fires to the Southwest and floods to the Midwest and dreary clouds and chill to the Pacific Northwest, it's summertime and the livin' is easy.

I don't know. The fact is that historical volatility and implied volatility on the S&P 500 are practically one atop the other, which means hopes and fears are in balance.

The VIX, which is a measure of S&P 500 implied volatility, is at the low end of the range set from the summer of 2007, when capitalist finance began its most recent collapse, which means the great fear engendered by the calamity has pretty much dissipated, whatever the jobs reports say.

No don't worry. Be happy.

Strong-trend Breakouts
sym phase adx bday blevel stop atr atr%
jun30 $67.84 $66.46 1.38 2.0%
jun30 $10.39 $11.08 0.69 6.6%
jun29 $17.86 $17.11 0.75 4.2%
Exchange-traded funds are marked with a plus sign (+) after the ticker symbol. My holdings are marked with an asterisk (*).

MERC showed up on a volume spike. It typically trades well below the levels that I scan.

CPA and SCSS are back-channel additions -- I liked their fundamental prospects, and from there found their charts matched my criteria.

Weak-trend Breakouts
sym phase adx bday blevel stop atr atr%
jun30 $15.19 $15.00 0.19 1.3%
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 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.

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