Wednesday, April 20, 2016

Thursday's Prospects

On Wednesday, April 20:

Of 480 large-cap stocks and exchange-traded funds in my analytical universe, 24 broke beyond their 20-day price channels, 12 in either direction.

One symbol giving a trading signal with high odds of success survived initial screening, as did one with low odds of success. Both broke out to the upside. High-odds symbols are candidates for directional trades, and low odds, for non-directional trades.

There are four prospects for trades coinciding with earnings announcements.

I shall do further analysis on Thursday, April 21.

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

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Trading signal survivors





Both symbols have implied volatility well below the level I consider acceptable for short-selling options, which is the 60th percentile or greater of volatility's most recent range.

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".

Thursday pm
Friday am

As with the trading signal prospects, three of the potential trades corresponding with earnings announcements have overly low implied volatility. The exception is AMZN, which meets my standards.

The conditions of all can change when trading resumes tomorrow. I shall make final decisons on trades after the opening bell and shall discuss them in my Agenda post.


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 20, 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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