Sunday, August 3, 2014

Monday's Prospects: Round 2

Rather than waiting for the lone first-round survivor from Monday's potential trades, I'm making a judgement now, based on the ambiguous chart and the absence of a bearish rating from Zacks Investment Research, the service I use to jump-start my fundamental analysis.

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

In the three-year daily SBUX chart, below, it's easy to see that SBUX has either begun a rise after an shallow correction of the rise from October 2012, or is in the midst of a sideways correction, of the sort known to Elliott wave analysis as a Flat.

Click on chart to enlarge.
SBUX 3 years daily bars
The bounce point is the 38.2% Fibonacci retracement level, a major point at which shallow corrections tend to reach the extreme.

If SBUX were to begin a clear series of lower highs and lower low with a major turning point below the April low of $67.93, then I would change my mind and consider SBUX to be in a downtrend.

But, not yet.

-- Tim Bovee, Fukuoka, Japan, Aug. 3, 2014 New York time


While traveling, I'm performing my analysis on a smaller universe of symbols and on an altered schedule. See "August Schedule" for details.

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.

My chart assessments are based on Elliott wave analysis, which 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.

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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