Monday, May 19, 2014

Monday's Prospects: Round 2

None of the six symbols that survived my first round of analysis made it past the second round. (See "Monday's Prospects" for a description of the first-round screening.)

SWY and ARTX, both potential bull plays, fell back within their 20-day price channels and so failed confirmation.

AMAT also failed confirmation under the special rules for breakouts after an earnings announcement. In such cases, the confirmation check comes the day after the first post-announcement trading day, and the 20-day price channel boundary set on that first trading day is considered to be the confirmation level. AMAT is trading below the post-announcement price channel, and so fails the second round analysis.

Two symbols, RAX and MTSC, had given bull signals from charts that, at first glance, appear to be bearish. I don't do contrarian plays.

MONT, a potential bear play on the small-cap list, failed confirmation because of wide bid/ask spread on its options.

I then turned to the supplemental list of large-cap bear signals. Unlike my primary lists of large-/mid-ap stocks, the supplemental list ignores historical odds of success on trading signals.

Of the two symbols on the supplemental list, one, RF, failed confirmation.

The other is INTC, one of the big fish in the corporate pond, trading more than 23 million shares a day. Zacks gives it a neutral rating. The stock is trading 58% above the level implied by earnings and growth, or 12% above the implied level if dividends are taken into account.

The chart at first glance can be analyzed as bearish, although of the sideways variety. It will take a more detailed look to understand where INTC actually stands.

I held INTC as a series of bear positions between November 2013 and early March this year. Shares rose 3.3% during the time I held the positions, producing a significant loss on the positions because of leverage.

That recent history will certainly be part of the analysis I'll post before the close today.


My shorter-term trading rules can be read here. My longer-term 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 decisions for his or her own account, and take responsibility for the consequences.

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