Thursday, August 28, 2014

Thursday's Finalists: SINA, ETE, CVTI

After the dust cleared away from a carnage of non-confirmations this morning, three symbols survived: China's largest Internet portal Sina Corp. (SINA) with a bear signal, and the New York energy investment company Energy Transfer Equity LP (ETE) and the Tennessee trucker Covenant Transportation Group Inc. with bull signals. (See "Thursday's Prospects" for the first round of analysis.)

Altogether 11 symbols failed confirmation, and a 12th showed a marked lack of momentum in the direction of the signal. That's more than a third of the 27 symbols that survived my first round of analysis.

An additional 11 symbols had charts that were insufficiently strong in the direction of the signal to justify a trade.

One bear signal had options that are too illiquid for use in building a bearish position.

All three of the finalists are ranked neutral by Zacks Investment Research, the service I use to short-cut my fundamental analysis.

CVTI has no options and so can't be leveraged or hedged. It is the least liquid of the group, with five-figure volume.

SINA and ETE each trades more than a million shares a day and have options with sufficient open interest. The front-month at-the-money bid/as spread on SINA puts is 3.8%, compared to a spread on ETE calls of 23%.

The narrower spread makes SINA much more attractive.

I intend to post a full analysis of SINA as a potential bear play under my shorter-term rules prior to the closing bell.

The bull signal from CB on my Innovators supplemental list isn't backed by a sufficiently bullish chart, so I've set it aside.

-- Tim Bovee, Portland, Oregon, Aug. 28, 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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