[10.4] free stock screener for HK stocks

Do you know you can screen for good stocks to trade in the HK share market? Even better that it is free provided by Google Finance, isn’t it?

The key problem is it is in Chinese.

To open it in English, use Google Chrome with translation.

 

Criteria for up trending stocks:-

1. Volume – set to 2 million shares (if in Chinese, set to 200* minimum){to filter out those laggard stocks that are not in the institutional portfolio}
2. Price at 13 week gain (i.e. at least 3 month or quarter high – up trending)
3. Earnings per share positive (good fundamentals)
4. Business data, return on equity positive in recent years (good fundamentals)
5. 5 year profit growth positive

link for up trend:

http://www.google.com.hk/finance#stockscreener?c0=MarketCap&c1=PE&c2=QuotePercChange&c3=Volume&min3=2000000&c4=Price13WeekPercChange&min4=1&c5=EPS&min5=1&c6=ReturnOnEquityYear&min6=1&c7=RevenueGrowthRate5Years&min7=1&region=hk&sector=AllSectors&exchange=HKG&sort&sortOrder& 

Last scan results:-

CLP, Cheung Kong (1038), China Mobile (941)

Criteria for down trending stocks ready to short:-

1. Volume – set to 2 million shares (if in Chinese, set to 200* minimum){to filter out those laggard stocks that are not in the institutional portfolio}
2. Price at 52 week low (one year low stocks confirmed down trending)
3. Earnings per share positive (good fundamentals)
4. Business data, return on equity positive in recent years (good fundamentals)
5. 5 year profit growth positive

 link for downtrend:

http://www.google.com.hk/finance#stockscreener?c0=MarketCap&c1=PE&c2=QuotePercChange&c3=Volume&min3=2000000&c4=EPS&min4=1&c5=ReturnOnEquityYear&min5=1&c6=RevenueGrowthRate5Years&min6=1&c7=Low52Week&min7=1&region=hk&sector=AllSectors&exchange=HKG&sort&sortOrder&

Last scan results with top volumes:-

CMBM, Sinopec, Jiangxi Copper, China Life, etc

[10.3] Buy put option – DOW

In the previous article (ref: 10.2), one of the 3 examples therein was DOW. This stock shows signs of weakness and is still trading below the cloud. If it can retreat and drop further next week, there is a good opportunity to buy put option on it.

DOW -  15 min chart extract from TOS

From the chart above, the support is about $24.00

If the price trades below $23.95, it will be below the cloud and out of the box (yellow).

For put option, we pick the following criteria:-

Period: Jan 2012 (over 100 days)

Strike: 24.00 (will be in-the-money and above trade price of 23.95)

DOW – put option chart of DOW Jan’12 @ strike 24

Volatility: < 60% acceptable (in the current volatile market)

Open interest: 151? Too low?

Agree that the present open interest is low. However, compare to the next strike of 25.00 (O/I = 9259), it will be interesting to see more O/I when market begins to trade lower prices.

Notice that the premium shot up from 2.40 to close at 2.72 with a theoretical level of 3.06

For those who like to do auto-trade, you may like to do this:

We place order to buy the put option with a possible LIMIT till 3.10 premium with a condition that share price trades below $24.00

Stop loss will be about $24.75 (top of the cloud) to $25.25 (top of the yellow box) depending on your risk adversity.

 

Disclaimer: This article is for education only and not a proposal, invitation or advice to buy or sell shares.

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[10.2] How to screen for stocks to buy put options

The best and free stock filter on the web is of course FINVIZ.COM

This article shows the technique to screen for stocks to buy put options. First, the key criteria:-

1. One year downtrend and also continuous downtrend the past month
2. Fundamentally still profitable – positive ROE (return on equity)
3. Optionable stocks with market prices above $20.00
4. Trading volumes high – many interested parties and maybe institutional players
5. Omit mega market capitalization – select those less than $200 billion.   

A stock which is still profitable will ensure it is still around and not forced into bankruptcy or possible delisting. However, a one year downtrend criteria is selected as we want stocks that perform weaker than the index. S&P500 peaked in end April and has been lower than a month ago.

From the screener, 3 stocks are selected as they show signs of weaknesses from their chart patterns.

Screener link: http://finviz.com/screener.ashx?v=111&f=cap_largeunder,fa_roe_pos,sh_avgvol_o2000,sh_curvol_o2000,sh_opt_option,sh_price_o20,ta_perf_52wdown,ta_perf2_4wdown&ft=3&o=-volume

JPM (JP Morgan)

Last candlestick is a bearish marubozu. This bar closed just above the conversion line and if it breaks down, it may drop back at least 8.5% to 2 year’s low.

RSI is still below the 50% line and GMMA is downwards with a big gap between the fast and slow averages.

DOW (Dow Chemical)

Similarly, RSI is below the 50% line and GMMA is downwards with a big gap between the fast and slow averages.

There is a possible 11% to 12% drop in price if overall market down next week.

CAT (Caterpillar)

The chart looks stronger than the above 2 examples. However, RSI is below the 50% line and GMMA is downwards with a big gap between the fast and slow averages.

It may drop below one year’s low again. The stock has been trading below or around the last lowest of $76.78 on 28^th October 2010.

Disclaimer: This article is for education only and not a proposal, invitation or advice to buy or sell shares or options. 

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[10.1] time to hold cash and wait for signals again

Someone asked whether we can still buy call options and I said quite difficult. It is easier to buy put these days. As long as the stock is down trending, we can enter.
(go to the lessons in August of this blog and find out more information)

Here are some potential puts:
GE
GILD
GLW
MDT
SU
These stocks did not perform strength when most stocks rebound last night with bullish engulfing patterns or forming hammer candlestick.

The key criteria we should look for will be:
1. The bar yesterday cannot close above at least half of yesterday's bar.
2. volume may be high last night but still not enough to push a higher close, that means still weak.
3. The chart is still below the cloud (if you use Ichimoku) or still downtrending and below key moving averages or out of the last Darvas Box.

However, I think we should hold on this week as we have to see the outcome of S&P500. It is rebounding and we cannot enter put this week. TRINs are showing bullishness and VIX is lower.

For call, I can only watch these 2:
MCD
D (Dominion)
These 2 are relatively strong, still making higher high last month when all others are struggling to reach the last high.

Finally, we should watch VIX closely. VIX = CBOE VOLATILITY.
(go to the links above and find out more information)

VIX above 40 means bearish and if VIX can drop below and continue below, we may consider cutting puts and watch calls. VIX at around 25 will be good to buy calls. So, at the moment, we concentrate on puts.


Disclaimer: This article is for education only and not a proposal, invitation or advice to buy or sell shares or options. 

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