Monday, March 11, 2013

Monday's breakout stats

Update: Both of the issues to survive my screens, VC and AM, failed the test of confirmation on Tuesday. They traded back within their price channels. So there is no need for further analysis, and no trade to be had today.

An unusual scan for breakouts from today's trading.

I analyzed 2,414 stocks and exchange-traded funds. Of those, 49 broke beyond their 20-day price channels.

Of the breakouts, only two survived my initial screening. If an issue fails to show historical odds of success in the direction of the breakout that are greater than breakeven, I don't consider them for trading.

Typically, I'll have at least half a dozen issues with better than even odds.

The two that survived the initial screening, VC and AM, are both too illiquid to support my standards for options trading, so when I analyze one or both of them on Tuesday, it will be as a potential stock trade.

For the past week all of my breakouts have been to the upside. This time, six of the 49 breakouts were to the downside.

I hesitate to conclude that this shows a weakening of the uptrend in the markets, but it's one possibility to consider.

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