Tuesday, September 10, 2013

Wednesday's Prospects

On Tuesday, Sept. 10:

Of 2,339 stocks and exchange-traded funds in this week's analytical universe, 197 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 181 to the upside and 16 to the downside.

Twenty-four symbols traded over the counter broke out, all to the upside.

Within my analytical universe, 9.5% of symbols gave bull or bear signals, up from 6.2% the prior trading day.

The ratio of bull to bear signals was 12.8:1, compared to 19.6:1 the prior trading day, a weakening of the bullish bias.

To date my screening method has required a 50% success rate or better for a stock to survive. That criterion today produced 62 survivors, far more than I can easily deal with in a live market. To help matters somewhat, I've changed the criterion to greater than 50%.

I've been using a combined yield and odds score of 5% or greater as a screen. I've raised it to 7%, thereby further reducing the number of survivors.

Thirty-two symbols traded on the major exchanges survived the revised criteria of my initial screening, all having broken out to the upside. They are ABC, ALKS, AMD, AMTD, BA, BMA, CSGP, EQM, ETN, FIBK, FLEX, FSRV, GDX, HBI, HL, IGTE, LAD, MANH, MDAS, MDCO, NCR, OC, PFG, PKG, PRAA, SEP, SSNC, TLLP, TWM, VRNT, XLS and ZNH.

Three symbols traded over the counter survived initial screening, all having  broken out to the upside. They are ICAGY, LZAGY and SCGLY.

I shall do further analysis on Wednesday, Sept. 11.

Because the number of symbols that survived screening is so great, I intend to initially limit my work to symbols having average volume of 2 million shares a day or greater. In descending volume order, they are GDX, AMD, FLEX, HL, BA, AMTD, ETN and TWM. If I find nothing I like in that batch, then I'll dig into lower volume symbols.

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 greater-than-even 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 7% 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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