Tuesday, June 25, 2013

Wednesday's Prospects

On Tuesday, June 25:

Of 2,289 stocks and exchange-traded funds in this week's analytical universe, 19 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 13 to the upside and six to the downside.

No symbols that are traded over the counter broke out.

The five highest-volume symbols to break out are WAG, CCL, NYCB, HCBK and LXRX.

Tuesday was the first double-digit day after three days in the triple digits, and the fewest breakouts in at least a month. It is also the first time the markets have shown a bullish bias, although just barely, after four days on the bear side.

Within my analytical universe, 0.8% of symbols gave bull or bear signals, down from 5.9% the prior trading day.

The ratio of bull to bear signals is 2:1, compared to 1:26 the prior trading day, a switch to a weak bullish bias

One of the major-exchange symbols survived my initial screening, MDCO, having broken out to the downside.

Two stocks that broke out to the upside, ILMN and WAL, had sufficiently good odds to make the initial cut, but they have earnings announcements within the next 30 days and so were struck from the list.

Earnings season officially begins July 8 when AA publishes earnings, so expect increasing numbers of breakouts to run up against my 30-days exclusion rule.

I'll do further analysis on MDCO on Wednesday, June 26.

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 whatever their open interest or sufficient volume to allow for the short sale of shares.

My cut-off point for bullish bias is a ratio of bull to bear signals of 2:1 or greater, and for bearish bias, 1:2 or smaller, rounded to the nearest whole number.


My trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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