Technical Signals for Option Trades - 2015 04 29
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 04 29
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 signals generated for April 29, 2015:
AAPL CALL JUN $130 - $3.90
JPM CALL JUN $65 - $0.89
SWKS CALL JUN $95 - $5.40
VRX CALL JUN $220 - $7.80
ADSK CALL JUN $60 - $2.41
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: Despite the pull back after their earnings announcement, AAPL continues to have positive technicals and crossed a signal today (9 Day RSI crossed above 14 Day RSI).
JPM: Overall strong technicals, but the 9 Day RSI is below 50 and also below the 14 Day RSI. The signal today was the MACD crossing over the 9 Day EMA MACD.
SWKS: This has weak technicals right now, despite the signal of the 9 Day RSI crossing above the 14 Day RSI. I would avoid this selection.
VRX: Strong technicals, strong up day today, and signal was the 5 Day Money Flow turned positive. Strong trend, however option price is higher due to volatility of the stock. I would avoid this selection.
ADSK: Weak technicals. However, had 2 strong signals today: 20 Day Moving Average Crossed above the 50 Day Moving Average and the 9 Day RSI crossed Above the 14 Day RSI. I would avoid this selection.