Wednesday, September 17, 2014

Wednesday's Finalists: BBG

The Colorado oil and natural gas exploration company Bill Barrett Corp. (BBG) is the lone finalist in my analysis of Tuesday's market session

Three symbols made it past the early stages of analysis: Bear signals MBT and DF, and bull signal BBG. (See "Wednesday's Prospects".)

All three confirmed their signals in trading today. However, MBT and DF have options that are illiquid and with overly wide bid/ask spreads. There is no way for me to construct a bear trade on those two symbols.

That left BBG, with a neutral ranking from Zacks Investment Research, the service I use to help speed my fundamental analysis.

BBG has two strikes against it.

First, its options are relatively illiquid, not a deal killer with a potential bull play but still, it makes leverage and hedging impossible and so renders the trade less attractive.

Second, the bull signal comes amid a downtrend that began in July 2011, and within a smaller scale decline that began in November 2013. Conceivably, this could be the big reversal, but that's not what the chart looks like, absent a breakout to a higher high.

Click on chart to enlarge.
BBG 4 years 2-day bars
I won't be doing further analysis on BBG and no longer consider it to be a potential trade.

-- Tim Bovee, Portland, Oregon, Sept. 17, 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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