Of 4,009 stocks and exchange-traded funds in my analytical universe, 82 mid- and large-cap symbols that are traded on the major American stock exchanges broke beyond their 20-day price channels, 42 to the upside and 40 to the downside.
Thirty-eight major-exchange small-cap symbols broke out, 12 to the upside and 26 to the downside.
Nine over-the-counter symbols broke out, all to the upside.
Nine mid- or large-cap symbol traded on the major exchanges survived my initial screening, seven having broken out to the upside and two to the downside. Six of the bull signals and one bear signal were produced in response to earnings and will require confirmation under the reset day rules.
No small-cap major-exchange symbols survived initial screening.
Two symbols traded over the counter survived my initial screening, both having broken out to the upside.
Two large-cap symbols survived screening for inclusion on the supplemental list of high-volume large-cap potential bear plays, having met the earnings exclusion test with sufficient open interest on its options, regardless of historical odds. Both bear signals are in reset day. In addition, one symbol had an earnings day breakout to the downside on Friday and will be considered under reset day rules on Monday.
I shall do further analysis of the surviving symbols on Friday, July 25.
First-round survivors
The lists are sorted in descending order by average yield.
Potential bull plays
| Mid-, large- cap
|
Small-cap
|
OTC
|
Reset day
|
Earnings day
|
Potential bear plays
| Mid-, large- cap
|
Small-cap
|
OTC
|
Large-cap supplemental
|
Reset day
|
Earnings day
|
The symbols are sorted into three groups and all have analyst coverage through the stock-ranking company Zacks. The groups are:
- mid- and large-cap stocks as well as selected exchange-traded funds listed on major exchanges,
- small-cap stocks on major exchanges,
- mid- and large-cap over-the-counter stocks.
I then screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
If the odds of success are greater than 50%, I next screen for the absence of an earnings announcement within the next 30 days.
For bear signals, I also screen to ensure the ability to do a trade because of the presence of options.
I sort by the results in descending order by the average yield on signals in the direction of the breakout in preparation for the second round of analysis after the opening bell.
-- Tim Bovee, Portland, Oregon, July 25, 2014
References
My 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.
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 decision decisions for his or her own account, and take responsibility for the consequences.License
All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at www.timbovee.com.T
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