Of the eight symbols that survived my first round of analysis (see "Monday's Prospects"):
- The two downside breakouts -- EDE and EIX -- have insufficient open interest on their options to support a bear play.
- Three failed confirmation: FCX, IPXL and XXL
- One, SBAC, has a bull signal and chart but a bearish rating from Zacks. I prefer that Zacks and the signal be aligned.
That brought the choice down to FLT, which is traded on the New York stock exchange, and ALIOF, which is traded over the counter. Both have equally bullish charts.
FLT has far greater average volume than ALIOF, although neither is liquid enough to support options plays. But liquidity counts, even for shares, and so I choose FLT for analysis.
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.
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.