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Technical Signals for Option Trades - 2015 05 14

Updated on May 14, 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 14

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

The are 5 signals triggered today.

AAPL CALL $130 JUN - $2.98

FB CALL $80 JUN - $2.99

AXP CALL $80 JUN - $1.98

SWKS PUT $95 JUN - $2.15

ADSK CALL $60 JUN - $2.06

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) have been range bound. The DOW and S&P were up 1% today and are nearing the tops of their ranges (18,289 and 2,126), yet volume was below average. Tomorrow (FRI May 15) is the Options Expiration for MAY contracts. Look for some volatility and some heavy volume. I would be 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.

AAPL: Stock price crossed above 20 Day Moving Average and 50 Day Moving Average and MACD turned positive.

FB: Stock price crossed above 20 Day Moving Average and 50 Day Moving Average and MACD crossed above the 9 Day EMA MACD.

AXP: MACD turned positive.

SWKS: 9 Day RSI crossed below the 14 Day RSI.

ADSK: MACD crossed above the 9 Day EMA MACD.

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