Tuesday, May 24, 2016

Wednesday's Prospects

On Tuesday, May 24:

Of 473 large-cap stocks and exchange-traded funds in my analytical universe, 24 broke beyond their 20-day price channels, 23 to the upside and one to the downside.

Three symbols giving trading signals with high odds of success survived initial screening, all having broken out to the upside. High-odds symbols are candidates for directional trades.

Two symbols with trading signals having low odds of success survived initial screening, all having broken out to the upside . Low-odds symbols are candidates for non-directional trades.

There is one prospect for a trade coinciding with an earnings announcements.

I shall do further analysis on Wednesday, May 25.

The next earnings season will begin on July 11 and last for six weeks, through Aug. 19.

Makers and Takers: The Rise of Finance and the Fall of American Business
by Rana Foroohar

Trading signal survivors





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".

Wednesday pm
Thursday am


All six prospects have implied volatility below my minimum requirement, which is in the 60th percentile of its most recent range, disqualifying them from further analysis.

I'll discuss my final decisions on trading in the Analysis post after the opening bell, although a full analysis for any of these prospects seems highly unlikely since volatility for all is below the 30th percentile.


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 and 2) the absence of an earnings announcement within the lifespan of the like options series I would trade.

I defer until the day of a possible trade a final screen for implied volatility in the 60th percentile or greater of its most recent range.

-- Tim Bovee, Portland, Oregon, May 24, 2016


Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.

I can be reached via comments on Private Trader posts or by email at datnillc@gmail.com.


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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 www.timbovee.com.Tss s ss'ss

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