Today’s task: choose a stock to buy with the money that will be rejoining cash tomorrow morning (actually, it has already arrived in my account).
Screen:- Schwab Equity Rating = A, B, C, or D (but not F)
- MACD = Recent cross above signal line
- Price compared with 50-day moving average = Moderately above
- Price compared with 10-day moving average = Moderately above
- Parabolic SAR = Bullish
| Company | Yearly gain | Indicators | Chart | |||||
|---|---|---|---|---|---|---|---|---|
| Symb | Name | Hold | MACD | ADX | PPO | pSAR | Trend | Sign |
| ADS | Alliance Data Systems | 35% | 25% | 35 | +0.06% | 12% | Hold | |
| AWI | Armstrong World Industries | 30% | 2% | 24 | +0.03% | 10% | Hold | |
| CALD | Callidus Software | 70% | 85% | 16 | +0.09% | 3% | Hold | Spinning top |
| CROX | Crocs, Inc. | 146% | 28% | 20 | +0.11% | 7% | Hold | |
| DKS | Dick's Sporting Goods | 52% | 45% | 20 | +0.05% | 6% | Hold | High wave |
| DPZ | Domino's Pizza | 25% | 14% | 17 | +0.09% | 7% | Hold | |
| ELMG | EMS Technologies | 34% | 5% | 14 | +0.59% | 6% | Hold | Spinning top |
| GCO | Genesco Inc. | 48% | 51% | 18 | +0.20% | 7% | Avoid | |
| KR | The Kroger Co. | 4% | 8% | 33 | +0.04% | 5% | Avoid | Long white |
| LINC | Lincoln Educational Svcs | −36% | −4% | 12 | +0.39% | 8% | Buy | Confirmed |
| MPX | Marine Products Corp. | −3% | −15% | 14 | +0.17% | 7% | Hold | Spinning top |
| MCRS | MICROS Systems, Inc. | 57% | 6% | 24 | +0.26% | 5% | Hold | |
| HK | Petrohawk Energy Corp. | 1% | −18% | 18 | +0.09% | 6% | Avoid | Long white |
| PII | Polaris Industries | 58% | 52% | 21 | +0.07% | 6% | Hold | |
| PCLN | Priceline.com, Inc. | 99% | 106% | 18 | +0.24% | 6% | Hold | |
| REGN | Regeneron Pharmaceuticals | 49% | 2% | 27 | −0.01% | 5% | Hold | |
| SPN | Superior Energy Svcs | 84% | 35% | 15 | +0.27% | 8% | Hold | |
| TLEO | Taleo Corp. | 34% | −5% | 14 | +0.03% | 7% | Sell? | Doji star |
| TMK | Torchmark Corp. | 31% | 9% | 20 | +0.01% | 3% | Buy | Confirmed |
| WYNN | Wynn Resorts, Ltd. | 93% | 29% | 25 | +0.25% | 6% | Hold | Spinning top |
For “Yearly gain”, the Hold value is how much I would have gotten if I bought the stock a year ago and just held it; the MACD value is how much I would have gotten if I spent the last year buying the stock whenever MACD(10,30,9) turned positive and selling whenever it turned negative. Green means MACD yields *more* than just holding the stock; orange means at least half as much; red for even less. The purpose of this indicator is to tell me how effective MACD (and therefore PPO) is as a predictor for when this stock will produce gains.
The Hold value comes from Google while MACD comes from Best Charts. The “Indicators” all come from StockCharts.com. The “Chart” columns come from AmericanBulls.com.
ADX is Wilder’s Average Directional Index or DMI(14). Green is for values between 25 and 35 (“strong trend”), orange for 15-25 (“weak trend”), red for others. Schwab says 25 means “buy”; Craig Ferguson says 25-30 is good while 50 means the trend will end soon.
PPO is the Percentage Price Oscillator or PPO(10,30,9). Positive values indicate a rising trend in recent days. To avoid bad stuff that has happened in the past, I don’t buy stocks whose PPO is less than +0.10%. I have not defined an orange range for this indicator.
pSAR is the Parabolic stop & reverse calculation. I use pSAR(0.2,0.2) for my stop price, so its value is how much risk I would be taking if I choose this stock to buy. It’s hard to know what colours are appropriate here. In recent days I have done well with ENTG and TNA, which had 6% stops, so now I’m thinking that maybe 7% could be reasonable. Most 2% stocks have not done well except CBS which did great. Most 3% and 4% recent stocks did poorly, but troubles in the Mideast interfered. For now I’m using orange for 2%, 3%, 4%, and 7%, green for 5% and 6, red for others.
Trend indicates whether AmericanBulls thinks I should own this stock or not, based on their automated analysis of its candlestick chart. Their values are Wait, Buy-if, Buy-confirmed, Hold, Sell-if, and Sell-confirmed. Sign is today’s candlestick pattern if they recognize one. I treat “Confirmed” as a sign since they get it from the chart.
* * * * *
Clearly, PCLN is the winner. It has no red indicators and only one orange. The runner-up would be GCO because its only red indicator is from AmericanBulls, which I’ve just started using and I don’t know yet how much trust to put in them. CALD, DKS, DPZ, and PII have only a single red indicator which might improve in a day or two, while CROX, MCRS, and WYNN are not going to get better any time soon. LINC is an interesting case: so far I have not tried purchasing any stock that has lost value overall for the last 12 months, but if ADX and pSAR improve then this could be a candidate.
I have put in my purchase order for PCLN, with a 6% stop.
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