Monday, June 16, 2014

Monday's Prospects: Round 2

All of the 10 prospects that survived my first round of analysis have failed to make it past the second round. (See "Monday's Prospects" for a full list of first-round survivors.)

Three failed confirmation by moving back within their 20-day price channels.

The one bear signal in the batch, GNC, had a double-digit front-month at-the-money bid/ask spread; my preference is for single-digit spreads.

One, KPTI, broke out while nearly doubling in price after a news report; it is a pharmaceutical company and so is especially prone to such things.

The rest, save one, produced bull signals on bearish charts.

The one remaining, MTDR, is a marginal case on the chart. It shows the hook that is characteristic of the market these days, as stocks falter after their April highs.

 Yet it is nearing that high and would at the least be worthy of a place on the Watchlist, except for one flaw.

MTDR has a bearish rating from Zacks Investment Research, the service I use to short-cut my consideration of a stock's fundamentals. My preference is for the Zacks rating and the direction of the potential trade to be aligned.

If Zacks had given MTDR a bullish rating, then I would place it on the Watchlist for consideration after it broke above the April high of $29.14, which forms the upper boundary of the 55-day price channel that is often used in Turtle trading.

But the Zacks rating is a deal killer, and I won't be analyzing MTDR, or any other symbol from the first round of analysis.

-- Tim Bovee, Portland, Oregon, June 16, 2014

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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