7/1 Top Prospects

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

Change in procedure: Under my rules I don’t open new positions in shares within 30 days of earnings. Beginning today, however, I shall report on such shares, marking them with a section symbol (§) next to the ticker symbol.

Strong-trend Breakouts

sym	phase	adx	bday	blevel	stop	atr	atr%
DPZ§		31	jul1	$25.86	$25.27	0.59	2.3%
SODA		26	jul1	$63.20	$60.23	2.97	4.7%
VHC		28	jul11	$30.50	$29.01	1.49	4.9%
VIP		35	jun30	$12.63	$12.92	0.29	2.3%

Exchange-traded funds are marked with a plus sign (+) after the ticker symbol. Stocks within 30 days of an earnings announcement are marked with a section symbol (§). My holdings are marked with an asterisk (*).

Looking at the fundamentals and analyst opinion, I’m neutral regarding near-term prospects for SODA and VHC, and extremely bearish regarding prospects for VIP (the mobile phone company that old hands will recognize as the one-time bull-market darling of Russian capitalism).

I’m quite bullish on prospects for DPZ, which I came to through back channels (looking at the fundamentals first, and then the chart).

Weak-trend Breakouts

sym	phase	adx	bday	blevel	stop	atr	atr%
IDX+		12	jul1	$32.02	$31.67	0.48	1.5%

Exchange-traded funds are marked with a plus sign (+) after the ticker symbol. Stocks within 30 days of an earnings announcement are marked with a section 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.

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