Tuesday, April 1, 2014

Tuesday's Prospects: Round 2

My second-round analysis of Tuesday's prospective trades came down to two finalists: MPAA and VVC. In the end, I've rejected them both.

Their charts are far advanced in long-term fifth-wave rises and I've been burnt a lot by truncated fifths.

Here's a quick-and-dirty Elliott wave analysis of the 20-year monthly charts for each, MPAA on the left and VVC on the right. In both cases, the third wave is longer than the first, so there are no restrictions on the length of the fifth waves now underway. And each has moved above all resistance of the past 20 years.

Click on chart to enlarge.
MPAA (left), VVC (right), both 20 years monthly bars
I would consider both for full analysis if their fifth waves weren't so far advanced, but they are quite mature and so I shall pass.

See "Tuesday's Prospects" for a list of symbols that made it past my first round of analysis into the second round.


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.

Elliott wave analysis tracks patterns in price movements. The principal practitioner of Elliott wave analysis is Robert Prechter at Elliott Wave International. His book, Elliott Wave Principle, is a must-read for people interested in this form of analysis, as is his most recent publication, Visual Guide to Elliott Wave Trading

Several web sites summarize Elliott wave theory, among them, Investopedia, StockCharts and Wikipedia.

See my post "Chart Analysis: Nomenclature" for an explanation of my method for labeling waves on the chart.

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.

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