Monday, August 25, 2014

Monday's Finalists: CBPO, GMCR, TRN

Bull signals from a Chinese pharmaceutical house, CBPO, a Vermont coffee roaster, GMCR, and a Texas-based industrial services and support company, TRN, are the finalists from Friday's market session.

Eleven symbols made it through the first round of analysis (see "Monday's Prospects").

The one bear signal, AUMN, has options that are insufficiently liquid to use in constructing a bearish position.

Of the bull signals, CRUS failed confirmation, VLP has been trading for less than a year and so fails to meet one of my criteria.

SLAB, HEES, FIBK and CRM have charts that are insufficiently bullish for my purpose.

That left four symbols, and so I turned to Zacks Investment Research, the service I use to short-cut my fundamental analysis.

One, LVNTA, has a bearish rating from Zacks, so out it goes.

That left three finalists. GMCR has a neutral rating, and two symbols, CBPO and TRN are rated bullish.

TRN has the better chart, having set a higher high today, while CBPO remains below its peak. Also, TRN has a lower price than CBPO in terms of earnings of growth forecasts, and it is also far more liquid, by nearly an order of magnitude.

GMCR's chart is as good as TRN's, but it is less liquid by a bit and also more expensive in terms of growth and earnings estimates.

It's a close call, but I've decided to go with TRN. I'll be posting a full analysis prior to the closing bell today.

-- Tim Bovee, Portland, Oregon, Aug. 25, 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.

From time to time I use the number 68.2% in using applied volatility to calculate the expected trading range. This comes from statistics and refers to the one standard deviation boundaries, which are expected to contain 68.2% of whatever is being studied. Putting it another way, given an item (a trade or whatever), there is a 68.2% chance that it will appear within those boundaries.

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.

See my post "Chart Analysis: Nomenclature" for an explanation of my method for labeling waves on the chart.

By preference I place my shorter-term trades in the last half hour before the closing bell in New York. See my essay "When is the best time to trade" for a discussion of the practice.

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