Saturday, April 16, 2016

Monday's Prospects

On Friday, April 15:

Of 480 large-cap stocks and exchange-traded funds in my analytical universe, three broke beyond their 20-day price channels, two to the upside and one to the downside. None survived initial screening because of my rule that forbids chart-signal trading within six weeks of an earning announcement.

There are three prospects for trades coinciding with earnings announcements.

I shall do further analysis on Monday, April 18.

Earnings season began April 11. The higher pace of announcements will continue for about four weeks from that date.

A book from my library →

Potential trades keyed to events

The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm".

Monday pm
Tuesday am

IBM, with implied volatility at the 76th percentile of its most recent range, and NFLX, at the 99th percentile, both meet my standards for that characteristic. NFLX has implied volatility in the 52nd percentile and is is below my 60th percentile minimum.

All three symbols have sufficient open interest on their options.

I intend to do full analyses of IBM and HOG and shall also analyze NFLX if its implied volatility improves.


The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.

I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.

For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.

-- Tim Bovee, Portland, Oregon, April 16, 2016


Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, 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 decision decisions for his or her own account, and take responsibility for the consequences.

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Based on a work at s ss'ss

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