Wednesday's Prospects

On Tuesday, May 28:

Of 2,309 stocks and exchange-traded funds in this week's analytical universe, 42 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 16 to the upside and 26 to the downside.

In addition, five that are traded over the counter broke out, one to the upside and four to the downside.

Within my analytical universe, 2% of symbols gave bull or bear signals, barely changed from the prior trading day.

The ratio of bull to bear signals is 1:1.8, compared to 1:6.5 the prior trading day, suggesting a neutral bias to the market. My cut-off point for bullish bias is 2:1 or greater, and for bearish bias, 1:2 or smaller.

Five of the major-exchange symbols survived my initial screening, four having broken out to the upside and one to the downside. The four bull signals were on AN, FBR, OMC and VPHM. The one bear signal was on NRG.

One over-the-counter symbol, AAUKY, survived my initial screening, having broken out to the upside.

I'll do further analysis on the survivors that confirm their signals by trading beyond their breakout levels on Wednesday, May 29.

The symbols I'm analyzing are mid- and large-cap stocks having analyst coverage, as well as selected exchange-traded funds. I screened them for

• the odds of a successful trades in the direction of the breakout since the present uptrend began on the S&P 500 weekly chart, on Oct. 4, 2011,
• a yield adjusted by those odds of 5% or greater,
• and absence of an earnings announcement within the next 30 days. 

For bear signals, I also screened to ensure the ability to do a trade, either because of the presence of options or sufficient liquidity to allow for short sale.