7/21 Top Prospects

Three breakouts beyond the 55-day price channel among the 600+ stocks and exchange traded funds I screened, all with weak trends. Most of the stocks, by far, are blocked from consideration by my earnings rule: No trades within 30 days of the announcement.

Lots of parabolic sar phase changes, though, including a bunch of sector exchange-traded funds covering interest-sensitive finance and utilities, health care, tech (yesterday), consumer staples and consumer discretionary. (See my posting about a strategy I'm trying based on the parabolic sar.)

This is not a portrait of an economy sinking into renewed recession as a result of the debt crisis. I think the markets, all in all, have concluded that Congress will take action sufficient to stave off a downgrade in sovereign debt.

Parabolic sar phase changes:

To the bull side: BAC, BCS, SCHW, EWA, XLY, XLP, XLF, XLV, XLU and DIA.

To the bear side: KR, OCZ, TLT and UUP.

Weak-trend Breakouts

sym	phase	adx	bday	blevel	stop	atr	atr%
JOYG		21	jul21	$100.66	$97.50	3.16	3.1%
THD+		24	jul21	$70.23	$69.06	1.17	1.7%
XLE		16	jul21	$78.97	$77.49	1.48	1.9%

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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