Tuesday, May 6, 2014

Tuesday's Prospects: Round 2

None of the seven symbols that survived my first round of analysis (see "Tuesday's Prospects") made it through the second round.

I won't be analyzing any symbols off of the prospects list today.

Of the seven, four failed confirmation by moving back to within their 20-day price channels: TWC, LMT, MMLP and AMRE.

Two were breakouts to the upside within bearish charts: INCY and DRRX. My rules disallow counter-trend plays.

BEAV had a large opening gap after announcing that it has hired advisers to restructure the business, including a sale. The Bloomberg News story by Thomas Black in Dallas and Serena Saitto in New York can be read here.

My practice is to not trade after a large price-moving announcement. Either the restructuring goes forward, with its impact on the company's finances already, for the most part, priced into the market, or restructuring fails and the stock price falls. Most of the risk in such cases is to the downside.

I intend to take this "day off" from analysis to put the final touches on a a major revision to my long-term trading rules, which are designed to take advantage of the favorable tax treatment given capital gains on positions held for more than a year.

I'll be posting the revised rules later today.


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.

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