Technical Signals for Option Trades - 2015 05 04
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Searching for Trade Signals
These are indicators that I track every day for 20 large cap stocks. I have back tested these indicators since January 2010 searching for signals that have a 70% success rate in predicting a 3% stock move within 4 weeks.
Whenever a stock gives a signal for an indicator that has historically given a 70% success rate, it will show up in the UP or DOWN columns under Signal.
These signals are specific to each stock. For example, the stock price crossing above the 50 Day Moving Average for AAPL has a success rate of 70%, but for XOM it is 41%. Therefore, when this occurs for AAPL it will show as a Signal. But when this happens for XOM, it will not show as a SIgnal.
Technicals for 2015 05 04
Signal: This is the number of technical signals met for this day that have a 70% historical success rate for predicting a 3% move in the stock price within the next 4 weeks.
Trend: This is where the technicals are for 7 Indicators:
Stock Price vs. 20 Day Moving Average
Stock Price vs. 50 Day Moving Average
9 Day RSI above or below 50
14 Day RSI above or below 50
Money Flow for the Day is Positive
5 Day Total Money Flow for the Day is Positive
Change in Accumulation/Distribution Calculation is Positive
There are 5 trade signals generated today:
AAPL CALL $130 JUN - $3.50
ABC CALL $115 JUN - $3.30
CAT CALL $90 JUN - $1.17
JPM CALL $65 JUN - $1.36
SWKS CALL $100 JUN - $4.00
Signals may conflict with your perceptions of the overall market. During those times, you should be very selective about which options you trade. Waiting for the market and the signals to be in alignment (ie. you predict the market will go up AND the signals are for CALLS) is prudent.
AAPL: It's 9 Day RSI Crossed above it's 14 Day RSI. AAPL still has 5 technicals in the positive, despite the pull back in price after their earnings announcement.
ABC: The 5 Day Money Flow turned positive. ABC has 6 technicals in the positive.
CAT: It's 9 Day RSI Crossed above it's 14 Day RSI. CAT still has 6 technicals in the positive.
JPM: It's 9 Day RSI Crossed above it's 14 Day RSI. JPM still has 7 technicals in the positive.
SWKS: It's MACD crossed the 9 Day EMA MACD. SWKS has 6 technicals in the positive.
Again, go with the trend! However, this trend appears shaky to me. Volume has been light and the indexes have been range bound (See http://optionsdr.hubpages.com/hub/Market-Conditions-and-Recommendations-2015-05-01). In addition, economic news and earnings news does not support a continuing upward trend. So, be very cautious about getting into new CALL positions. The ones mentioned above have had decent success historically, but that is not a success rate of 100%.