Wednesday, October 16, 2013

Thursday's Prospects

On Wednesday, Oct. 16:

Of 2,356 stocks and exchange-traded funds in this week's analytical universe, 88 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 81 to the upside and seven to the downside.

Fourteen symbols traded over the counter broke out, seven in each direction.

Within my analytical universe, 4.3% of symbols gave bull or bear signals, compared to 0.9% the prior trading day.

The ratio of bull to bear signals was 6.3:1, compared to 1:1.8 the prior trading day, returning the markets to a bullish bias.

Seventeen symbols traded on the major exchanges survived my initial screening, 14 having broken out to the upside and three to the downside. The upside breakouts were by BLOX, CEA, CTAS, EWY, FANG, IWO, KSS, QLD, QQQ, SIG, SPLS, TJX, UNFI and WAG. The downside breakouts were by DSW, ERY and FAZ.

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

Earnings season began Oct. 8. The exclusion rule in my trading plan forbids me from opening new positions in stocks within 30 days of an earnings announcement. This means that many symbols are being removed from my prospective trades list during initial screening.

I shall do further analysis on Thursday, Oct. 17.

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...
  • even or greater 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,
  • an average yield of 3% or greater in the direction of the breakout,
  • 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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