11/17 – 3:15 p.m. New York time
Today’s outcomes: I exited a shares position on SPLK for a profit, having passed on entering a shares position on SBLK (see below for reasons why).
11/17 – 2:45 p.m. New York time
I’m passing without further an analysis an earnings play using shares on SBLK.
After a review of past shares trades coinciding with earnings, I’ve decided to add a directionality indicator to my analysis: The ADX and its two associated components, the +DI and the -DI. The indicator measures the extend to which a stock is trending upward (+DI) or downward (-DI) over a period of time. They are combined in the ADX. A Wikipedia article on the subject provides more detail.
In practice, I shall going forward require that an acceptable trade have an ADX of 25 or better, meaning it is trending, and a +DI that is higher than the -DI, meaning that the trend is up. The higher the +DI relative to the -DI, the more attractive the trade will be.
The other metrics I’ve looked at: A Zacks score of 3 or better and an earnings surprise predictor rating of 1 or better.
SBLK passes the two Zacks metrics but has a +DI of 14.9, below the -DI of 29.1. The aDX is low, at 18.6.
11/17 – 9:45 a.m. New York time
I have exited SPLK for a profit.
11/16 – 7:30 p.m. New York time
I have one prospective trade for action on Friday, an earnings play on SBLK using shares as a vehicle. This is a different symbol than is SPLK, which published earnings on Thursday. Most confusing.
By Tim Bovee, Portland, Oregon, November 16-17, 2017
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.
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