Monday's Prospects

On Friday, July 5:

Of 2,302 stocks and exchange-traded funds in this week's analytical universe, 131 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 129 to the upside and two to the downside.

Eight symbols that are traded over the counter broke out, seven to the upside and one to the downside.

The five highest-volume symbols to break out are DELL, EWJ, WFC, TNA and HST.

Within my analytical universe, 6% of symbols gave bull or bear signals, up from 1% the prior trading day. It is the highest rate since June 22.

The ratio of bull to bear signals is 45:1, compared to 3:1 the prior trading day, by far the strongest bullish bias seen in recent trading and the first day to top 20:1 since the present market downturn began on May 22.

Four of the major-exchange symbols survived my initial screening, three having broken out to the upside and one to the downside. The bull signals are CCOI, CREE and TIBX. The bear signal is FAZ.

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

Twenty-five symbols that survived the odds and yield analysis were excluded from consideration because they will publish earnings within 30 days of the breakout. They are ASML, AXL, BKH, CHKP, DFS, EA, ETN, FIRE, FNP, GLT, GPI, HNI, MOH, NR, NUS, PGR, PL, PLXS, PZZA, SBUX, SNI, SSYS, TSCO, TWTC and WFC.

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

I'll do further analysis of the surviving symbols on Monday, July 8.

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.

References

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

Disclaimer

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.