Wednesday's Finalists: GNRC, TEX, HAL, CVTI, CVX

The one bull signal among my finalists, Covenant Transportation Group (CVTI), has no options and so can't be leveraged or hedged. I disgarded it immediately, despite its bullish ranking from Zacks Investment Research.

Oils account for half the bearish finalists. Half means two, so it's less impressive than it might seem.

The two oils are the oil company Chevron Corp. (CVX) and the oilfield services provider Halliburton Co. (HAL). I'm partial to Chevron, although it has one strike against it.

The other two finalists, also bear signals, are both heavy equipment companies. Generac Holdings Inc. (GNRC) makes generators for a range of markets, from residential up to industrial, and Terex Corp. (TEX) makes machinery used in construction, quarrying and mining.

Altogether 13 symbols survived my initial screening. In addition, one other symbol passed muster from my supplemental list of liquid potential bear plays. The supplemental list survivor, as it turns out, is my favorite, CVX. (See "Wednesday's Prospects" for an account of the early round of analysis.)

Of the 13, one, VLCCF, failed confirmation, moving back within its 20-day price channel.

Five had options problems -- insufficient open interest or overly wide bid/ask spreads -- to use in construction a trade: NSR, CNHI, WTI, HNR and FOR.

Two, VECO and HZNP, had charts that were insufficiently strong in the direction of the signal.

The remaining finalists all are optionable, have charts that support their signals and are rated neutral by Zacks.

GNRC and HAL are the less liquid of the batch, and so I set them aside.

Of the oils, I find the CVX chart to be the more bearish than the HAL chart. CVX appears to have more downward momentum.

The strike against CVX is that it was on the supplemental list. It had insufficiently good odds of success to make the main list for large caps.

Even so, in my analytical words, the chart trumps all. So I'll set aside the HAL and focus on CVX as a potentail bear play for my analysis today, which I shall post prior to the closing bell.

-- Tim Bovee, Portland, Oregon, Sept. 10, 2014

References

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.

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 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.