Tim Bovee, Private Trader: Tuesday's Prospects: Round 2

Tuesday, May 20, 2014

Tuesday's Prospects: Round 2

The two best picks out of the 10 symbols that survived my first round of analysis (see "Tuesday's Prospects") are both high-dividend real-estate plays. As such, they'll go better as trades under my longer-term rules, which require that I hold on to the position for at least a year, hedging with options if needed to preserve capital during downturns.

The two are BXMT from the large-/mid-cap list, and NYMT from the small-cap list. The "MT" in the symbols stands for mortgage trust.

Of the others, two failed confirmation of their bull signals, moving back into their 20-day price channels: AOS and NEO.

Two were bull signals with charts that seem bearish at first glance: IDIX and KCRPY.

Two potential bear plays, CBD and CPL, have insufficient open interest on their options for me to construct a workable bear spread out of options.

NOBGY, with share volume running in the three-thousands, on average, is a bit too illiquid for my taste.

TEP, a natural gas storage and transportation company. Its a good business during the present boom in fossil fuels and has a bullish chart. However, its options have low open interest and so any position would be shares, which would cost me leverage. And it has a 3.48% dividend, which makes it more a candidate for a longer-term trade. I'm adding TEP to my Watchlist and may look at it later this week if I have no good candidates for analysis.

That left the two real-estate plays. I'll be writing an analysis that looks at both BXMT and NYMT, and shall post it before the closing bell.

References

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.

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.