Thursday's Prospects: Round 2

None of the three symbols that survived my first round of analysis has made it past the second round. (See "Thursday's Prospects" for the first round of analysis.)

The one bear signal, BRC, has insufficient open interest to allow construction of a bear position.

The bull signal SGSOY failed confirmation, leaving LFL as the lone symbol standing. 

LFL, as it turns out, gave a bull signal within a downtrend. If anything, it is a counter-trend retracement.

The chart below, with the descending trendline in red, clearly shows that LFL has been in a near-term downtrend since last November, with a small counter-trend rally in January and another one still underway.

The horizontal trendline, also in red, shows the nearest upside resistance at $15.55. LFL broke above that level at the open today, but a bit more than an hour into the trading day fell below it and has not yet returned.

In order to consider a trade in LFL, I would want to see a decisive close above $15.55, and better still, above the January peak of $16.36. Failing that, it's hard for me to consider this as even a serious counter-trend rally, much less an uptrend.

I don't intend to do any further analysis on LFL, nor will I be trading from the prospects list today.

Click on chart to enlarge.

LFL 4 yers 3-day bars

References

My shorter-term 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 decisions for his or her own account, and take responsibility for the consequences.