Tuesday, January 20, 2015

Tuesday's Finalists

Update 1/20/2015: I've posted the SLV analysis here. Much to my own surprise, I took the trade.

Of the three symbols that made it past the early rounds of analysis, CRZO failed to confirm its bull signal, dropping back within its 20-day price channel, and VNO with a huge gap down that produced a bear signal was disqualified because the signal was based on a news report: The company is spinning off part of its operation into a separate company.

(See "Tuesday's Prospects" for a description of the early analysis.)

That leaves SLV as the finalist, and an intriguing one it is. With 3:1 odds, historically, in favor of a successful bull trade, and without of the complications of an earnings announcement in the midst of this earnings season, it seems like a way to mix up my trading by bringing a different strategy to the table.

But, there is a complication, which I shall discuss in a short analysis to be posted later today.

The one company on my innovators list to give a bull signal, SAM, turns out to be unsuitable for a trade based on options. The front-month at-the-money bid/ask spread is north of 30%, more than triple the maximum allowed under my preference for single-digit percentage spreads.

I would consider for a longer-term play, but I use a different signaling method for that strategy and SAM doesn't qualify at present.

I've placed trades on four volatility plays keyed to earnings: CREE, IBM, NFLX and USB. See the analysis here.

-- Tim Bovee, Portland, Oregon, Jan. 20, 2015


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.


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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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