The other two have low implied volatility. The symbols are STZ and NEM.
STZ is at the 43rd percentile of the most recent range and 53rd of the annual range. I used the annual for initial screening last night because I can pull it directly off of my trading software. However, for the more detailed final analysis the next day, I use the most recent range as having finer granularity and more significance.
NEM shows a great discrepancy between the two ways of assessing implied volatility. The annual percentile is the 56th, but the range-based percentile is the 26th.
In initial screening based on the annual range I require the 50th percentile or higher, a criterion both symbols met. For the final screening based on the most recent range I require the 60th percentile or higher. Both symols failed that test, NEM by a huge margin. It is unusual to see that great a discrepenacy -- 30 percentile points -- between results from the annual range and the most recent range.
At any rate, all the symbols have failed, and I intend no further analyses today and shall open no new positions.
-- Tim Bovee, Portland, Oregon, June 1, 2016
by Richard D. Wolff
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Elliott wave analysis tracks patterns in price movements. StockCharts has a good explainer. The principal practioner 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.
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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.
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