Monday, December 15, 2014

Monday's Finalists: GG, SNY, PAY, ADBE

The Difficult Dozen. Twelve symbols, all bear signals, survived my early analysis over the weekend. (See "Monday's Prospects".) Twelve were confirmed in trading this morning.

Looking closer, I was able to discard four because their charts were insufficiently bearish to support a trade.

Of the remaining eight, I found little to distinguish among them.

When in doubt, go for the liquidity. Two the eight have average volume above a million shares a day: GG and SNY. The volume on GG is the highest, but only by a little.

My absolutely most favorite way of trading these days is short term volatility plays, structured as vertical spreads on options sold for a net credit and expiring in the front month, or sooner if Weeklys are available.

GG has Weeklys in its options inventory and implied volatility at the peak of its rise from last August. SNY has no Weeklys -- only the regular monthly issues -- and implied volatility stands at 60%.

It's a no-brainer, really. I'll analyze GG, using the same techniques as I use for plays that are keyed to earnings.

Speaking of earnings, among the among the companies announcing after the close today or the opening bell tomorrow, PAY was the lone survivor. It made to the finish line in fine fashion, and I've posted an analysis. See "PAY: Volatility play".

One symbol from my list of innovative companies, ADBE, gave a bull signal. I'm already in a bearish position in ADBE that expires at the end of the week. Rather than opening a counter-position to the bull side, I shall continue to work through how best to mitigate loss on my bear position.

-- Tim Bovee, Portland, Oregon, Dec. 15, 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. My volatility trading rules 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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