Saturday, August 17, 2013

Monday's Prospects

On Friday, Aug. 16:

Of 2,309 stocks and exchange-traded funds in this week's analytical universe, 62 that are traded on the major American stock exchanges broke beyond their 20-day price channels, three to the upside and 59 to the downside.

One symbol traded over the counter broke out, to the downside.

Within my analytical universe, 2.7% of symbols gave bull or bear signals, down from 10.3% the prior trading day.

The ratio of bull to bear signals is 1:20, a strengthening of the bearish bias from 1.13.1 the prior trading day. It is the strongest bearish bias since June 20, when the ratio was 1:26.2.

One symbol traded on the major exchanges survived my initial screening, OIBR, to the downside. All but the one symbol failed because of less than even historical odds of a successful trade in the direction of the breakout, almost entirely to the downside.

I can immediately rule out OIBR as a potential trade because, although it has options, there are only two strike prices and they have no open interest.

I've set aside three symbols with unacceptable odds but high volume for consideration on Monday. They are CMCSA, PFE and WFC. All broke out to the downside.

(I discussed how trend changes impact odds calculations in my analysis Friday of MNKD, which can be found here.)

No symbol traded over the counter survived my initial screening.

I shall do further analysis on Monday, Aug. 19.

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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