Monday, July 21, 2014

Monday's Prospects: Round 2

Of the four symbols that survived my first round of analysis, two have made it to Round 2: BX from the mid-/large-cap list and ENSV from the small-cap list.

The two that failed to make the grade, both with bull signals, are the fund EWZ, which has a bearish rating from Zacks Investment Research, and ABEV, which has an insufficiently bullish chart for my purposes.

The BX chart is quite advanced in its bull run, although it is definitely a bullish chart. I'll post an analysis with a chart talk prior to the closing bell.

However, I'm not going to trade it because I already have BX exposure as a long-term trade on one of its funds, BXMT, and I don't want to double down.

BX, with a dividend running around 4%, would go best as a trade under my longer-term rules. However, it has a price-earnings-growth-yield (PEGY) ratio of 2.62, which is quite high. Another way of thinking of the ratio is that the stock is overpriced more than twice over, and the growth forecasts imply a fair price of $13.53 rather than the current market price of $35.46.

I pay little attention to the PEG and PEGY for my shorter-term trades, but I'm reluctant to pay for more than a 1.25 PEG(Y) for the longer-term positions.

ENSV pays no dividend and works best as a shorter-term play, so the PEG doesn't come into the picture. On the chart I count it as completing a 5th wave up.

The main strike against ENSV is that it has no options, and so I can't do a leveraged play. At this point I prefer to hold back my funds for either leveraged shorter-term plays or whatever decent longer-term plays might come my way.

Bottom line: I'm declining to trade both symbols, and I'll post the BX chart talk soon.

See "Monday's Prospects" for a full description of my first round of analysis.

-- Tim Bovee, Portland, Oregon, July 21, 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.

Creative Commons 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

No comments:

Post a Comment