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Technical Signals for Option Trades - 2015 05 08

Updated on May 8, 2015

Tips for staying up to date......

Be sure to "FOLLOW" OptionsDR so that you will be notified of each new post. I try to post technical signals any day they occur (so this could be daily) and provide a market update each week.

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 08

Terms

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

Summary

There are 10 trade signals generated today:

AAPL CALL $130 JUN - $2.80

FB PUT $75 JUN - $1.04

ABC CALL $115 JUN - $2.80

BA CALL $145 JUN - $3.95

AXP CALL $80 JUN - $1.22

CAT CALL $90 JUN - $1.08

GS CALL $200 JUN - $4.60

V CALL $70 JUN - $1.52

SWKS CALL $100 JUN - $3.00

VRX CALL $220 JUN - $11.10

Deeper Analysis

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.

The indexes (S&P and DOW) both remain range bound. Both indexes were up over 1% today. However, volume remained below average, which was surprising given the strong upward direction for the day. I would remain cautious until the markets give a clear indication of what direction they are heading. That would mean breaking above or below this range and doing so on increased volume. Based on overall economic data and current earnings reports, my expectations are for a downward move from here. There MANY signals triggered today (most of them CALLS), but I am not yet convinced of the market direction, so be cautious.

AAPL: Stock price crossed above 20 Day and 50 Day Moving Averages.

FB: 20 Day Moving Average crossed below 50 Day Moving Average.

ABC: Stock price crossed above 20 Day Moving Average and 5 Day Money Flow turned positive

BA: 9 Day RSI crossed above 14 Day RSI.

AXP: 9 Day RSI crossed above 14 Day RSI.

CAT: 9 Day RSI crossed above 14 Day RSI.

GS: Stock price crossed above 20 Day Moving Average and 9 Day RSI Crossed above 14 Day RSI.

V: 5 Day Money Flow turned positive, MACD crossed above 9 Day EMA MACD and the MACD turned positive.

SWKS: MACD crossed above 9 Day EMA MACD.

VRX: 9 Day RSI crossed above 14 Day RSI.

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