Wednesday's Prospects

Note: I've made a change in my screening procedure, replacing the two-pass odds then net yield  screen with a single pass net yield adjusted by odds. See the "Methodology" section below for details.

On Tuesday, Oct. 29:

Of 2,399 stocks and exchange-traded funds in this week's analytical universe, 64 that are traded on the major American stock exchanges broke beyond their 20-day price channels, 40 to the upside and 24 to the downside.

Three symbols traded over the counter broke out, all to the downside.

Six symbols traded on the major exchanges survived my initial screening, all having broken out to the upside. They are ACN, GY, LSI, PTEN, TRIP and WNS.

No symbols traded over the counter survived my initial screening.

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 Wednesday, Oct. 30.

Methodology

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...

• an average yield of 3% or greater when adjusted for the odds of a successful trades in the direction of the breakout since the present uptrend began on the S&P 500 chart, on Oct. 4, 2011, calculated as average yield multiplied by the odds,
• 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.

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.