Wednesday's Prospects

On Tuesday, Aug. 5:

Of 261 large-cap stocks and exchange-traded funds in my analytical universe, one symbol broke beyond its 20-day price channel, to the downside.

It didn't survive my initial screening.

The non-survivor was TGT, and it publishes earnings on Aug. 20, putting it within the 30-day earnings exclusion period.

I'm also  tracking a supplemental list of 37 innovative companies. Normally, I don't do story stocks, but I'm making an exception in the case of these companies because I find them to be fascinating. Of course, a good story will get a stock on the list, but it still must be the stringent trading criteria I've established to be a viable trade.

One symbol on the innovators list gave a signal, TMUS, on the bull side. I'll take another look at TMUS in my "Wednesday's Prospects: Round 2" report and decide whether I want to consider it further.

The next round of earnings began July 8 with the announcement by AA. Under the exclusion rule that forbids me from opening new positions in stocks within 30 days of an earnings announcement, increasing numbers of symbols will be removed from my prospective trades list during initial screening.

Methodology

I'm traveling in East Asia and to speed processing, I've shrunk my universe of stocks for analysis during my journey. I'll return to full operation after Aug. 19.

The symbols in my analytical universe all have analyst coverage through the stock-ranking company Zacks.

I 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 with sufficient open interest for the purpose.

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, Fukuoka, Japan, Aug. 4, 2014 New York time

References

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.

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