Tuesday's Prospects

On Monday, July 1:

Of 2,284 stocks and exchange-traded funds in this week's analytical universe, 84 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 77 to the upside and seven to the downside.

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

The five highest-volume symbols to break out are DAL, BBY, GNW, CIE and ARIA. (I've excluded the top two, NWSA and ONXX, which had massive opening gaps on news.)

Within my analytical universe, 3.9% of symbols gave bull or bear signals, up from 1.7% the prior trading day. It is the highest breakout rate since June 24, when 5.9% of my universe gave signals.

The ratio of bull to bear signals is 10:1, compared to 5:1 the prior trading day, a doubling of the market's bullish bias.

Twenty of the major-exchange symbols survived my initial screening, all having broken out to the upside. They are AIT, ALNY, DRC, DSW, DV, ERIE, ESGR, GNW, GWRE, HAR, IX, LFUS, MATX, MMP, MOG.A, MTU, OPK, PNG, SLH and SPLK.

One of the over-the-counter symbols survived my initial screening, MSADY, to the upside.

Eight symbols were excluded from consideration because they will publish earnings within 30 days of the breakout. They are ACIW, BPOP, CR, DAL, EEFT, FUJIY, HAS and ICA.

Earnings season officially begins July 8 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 Tuesday, July 2.

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.