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  • PatternDNA Long & Short Update from April 27th
    Nine stocks were given the PatternDNA treatment before my vacation. These were:  Chimera Investment (NYSE:CIM), Abbott Labortatories (NYSE:ABT), Expedia (NASDAQ:EXPE), Merck & Co. (NYSE:MRK), First Energy (NYSE:FE), Newmont Mining (NYSE:NEM), Progressive (NYSE:PGR), First Solar (NASDAQ:FSLR), and Mastercard (NYSE:MA).

    Other than for Progressive (PGR), which offered a 77% and 70% probability for a higher close on the second and fifth day from the Pattern, there was no strong suggestion for a significant move in either direction from remaining stocks over the immediate 5-day outlook. At best, PatternDNA suggested an average probability of 56% for a higher close on the fifth day from the open price the day after the Pattern completed from the nine stocks.  

    The eventual outcome was positive. Biggest gainer was First Energy (FE) at 6.6%. It was followed by Progressive (PGR) at 4.0% which fit well with PatternDNA's outlook. There were losses for Newmont Mining (NEM) and First Solar (FSLR) which lost -3.1% and -2.3% respectively, but remaining stocks added a couple of percentage points on the week.

    The positive outlook offered by PatternDNA for Progessive (PGR) on both short and longer time frames held up well to scrutiny. Of the three projections above 60% PatternDNA scored two out of three and was two for two where the projection was above 70%.
    Tags: CIM, ABT, EXPE, MRK, FE, NEM, PGR, FSLR, MA
    May 25 10:36 AM | Link | Comment!
  • PatternDNA of the Week: HGGYZ
    This week's pattern comes from Progressive (NYSE:PGR). The sequence is built off a mild bearish day, followed by two bearish days, then two neutral days.



    The pattern performed strongest on the second day after the pattern, although at the Strong Match there was a low number of matches.

    Match No. of
    Patterns
    1-day
    % Win
    2-day
    % Win
    5-day
    % Win
    Average Return
    Per Trade (> 5 day)
    Weakest 165 55 60 57 5.4
    Weak 62 59 66 60 4.7
    Neutral 33 58 77 70 6.0
    Strong 8 40 90 70 4.1
    Strongest 0 n/a n/a n/a n/a
     
    Despite the strong outlook over the second and fifth day of the pattern, the picture over the longer term is more mixed. The Average Return Per Trade (Average Return Per Trade assumes an initial stop of 10%, raised to 5% off the price reached on a 15% gain. Ultimate Profit Target of 25%) didn't exhibit a consistent return on increasing Match. Over the basket of 18 U.S. stocks the Average Return ranged from 4.1% to 6.0%

    However, despite the inconsistent Average Return Per Trade the win percentage remained consistently high, ranging from 75-82%. So while a handful of outsized losses brought down the Average Return it's a regular winner.  

    Running a Market Scan at a Neutral Match returned 12 matches. One of the 12 stocks was Mattel (NASDAQ:MAT), a stock which recently enjoyed a breakout. Is this pattern a good omen going forward?

    Zignals Chart Image
    Tags: PGR, MAT
    Apr 27 10:53 AM | Link | Comment!
  • Long and Short Ideas for April 27th
    We sourced 9 stocks recently purchased by Paul Tudor Jones. How do these stocks look when given the PatternDNA treatment? The stocks are Chimera Investment (NYSE:CIM), Abbott Labortatories (NYSE:ABT), Expedia (NASDAQ:EXPE), Merck & Co. (NYSE:MRK), First Energy (NYSE:FE), Newmont Mining (NYSE:NEM), Progressive (NYSE:PGR), First Solar (NASDAQ:FSLR), Mastercard (NYSE:MA)

    Stock No. of
    Patterns
    1-day
    % Win
    2-day
    % Win
    5-day
    % Win
    Average Return
    Per Trade ( > 5 day)
    CIM 203 37 50 57 4.6
    ABT 157 46 47 56 4.5
    EXPE 355 48 46 57 4.7
    MRK 69 43 49 59 5.1
    FE 210 58 53 50 4.8
    NEM 36 57 57 54 6.1
    PGR 33 58 77 70 6.0
    FSLR 77 54 48 51 4.7
    MA 227 47 51 51 3.9

    Progressive (PGR) offered the strongest outlook for tomorrow's and next week's close (from today's open price) for a higher close. PatternDNA suggests there is a 77% probability for a higher close on Thursday and a 70% probability for a higher close next Tuesday. Chimera Investment (CIM) was the only other projection of note with a 63% probability of a lower close today. The remaining seven stocks had a relatively flat outlook.

    Over the three outlook days there was an average probability of 50%, 53% and 56% for a higher close for today, tomorrow and by next Tuesday. Not great odds.

    The outlook over the longer term was more positive. An Average Return Per Trade (Average Return Per Trade assumes an initial stop of 10%, raised to 5% off the price reached on a 15% gain. Ultimate Profit Target of 25%) of over 6.0% was projected for Newmont Mining (NEM) and Progressive (PGR). The pattern displayed for Progressive (PGR) was not only one which did well over the short term, but over the long term too. Of the 33 matches, 82% returned an average profit of 9.7%. Where it hurt was the 18% of trades which lost on average -10.6%, actually exceeding the protective stop threshold of 10%; when this pattern burned it burned you bad!

    But looking beyond Progessive, the patterns on display across the nine stocks tended to favour bulls over the long term. The percentage of winning trades ranged from 59% for Merck (MRK) to the aforementioned 82% of Progressive (PGR). The average win percentage for the nine patterns was 66%.

    So while the next 5-day outlook is a little mixed, over the longer term the patterns on show are more likely to deliver long side winners. 
    Tags: CIM, ABT, EXPE, MRK, FE, NEM, PGR, FSLR, MA
    Apr 27 10:06 AM | Link | Comment!
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