I removed one symbol from consideration because it is a short fund, meaning it moves contrary to the direction of the market: TBT.
Of the others, four have options grids suitable for constructing the leveraged and hedged positions that are my bread and butter these days. Those finalists are SBUX, GPS, LLY and IWM.
(See "Thursday's Prospects" for a description of the early rounds of screening.)
The SBUX bull signal came on news that the company would do a 2:1 stock split on April 8. Normally under my rules I pass over trading signals caused by news, on the theory that the information has already been built into the price.
LLY publishes earnings in April. I'd prefer to reserve trading for a volatility play coinciding with that event. With the next earnings season beginning April 8, this sort of choice will be more and more common.
GPS and IWM, with bull signals, have both broken past resistance. IWM is far more liquid than GPS and has greater flexibility built into its options grid.
I shall post an analysis of IWM prior to the closing bell.
One of the four symbols from my list of innovative companies was SBUX, discussed above. The other three -- CB, CTSH and TM -- have their next earnings announcements in sight, and I would rather wait for the chance to do volatility plays rather than committing funds now.
I posted an analysis of today's potential volatility play earlier in the morning. See "NKE: Iron condor, volatility rules".
-- Tim Bovee, Portland, Oregon, March 19, 2015
My price channel trading rules can be read here. My long-term share trading rules can be read here. My volatility trading rules can be read here. The channel rules are based on the classic Turtle Trading rules, which can be read here.
Elliott wave analysis 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.
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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 decision decisions for his or her own account, and take responsibility for the consequences.License
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