Thursday, April 21, 2011

PatternDNA - CANSLIM Analysis

Building on the previous article, how does PatternDNA assess the outlook over the next five days (starting from Thursday's open) for our 8 CANSLIM picks.

PatternDNA projections are derived from a pool of 18 U.S. stocks. Expected returns and win probabilities are calculated from patterns matched in these stocks over the past year and performance assessed as from the open price the day after the pattern completes. The Average Return per Trade is an expected long(er)-term return based on the use of a trailing target and stop (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%).

After Wednesday's big gains, PatternDNA outlook for Thursday and Friday is more of a coin toss. Cognizant Technology Solutions Corporation (CTSH) has a bearish outlook for the coming couple of days, with a 70% probability for a lower close Thursday (off Thursday's open price, not Wednesday's close).

Better is the outlook for next Wednesday's close. Apple (AAPL), Vale S.A. (VALE), Baidu (BIDU), Research in Motion (RIMM) and Barrick Gold (ABX) all have a 60% probability or more for a higher close (from Thursday's open price). With the Median projection across the eight stocks suggesting a bullish outlook for next week.

PatternDNA analysis of the long(er) term trade outlook employing a trailing stop strategy (initial stop of 10%, raised to 5% off the price after a 15% gain, ultimate profit target of 25% assuming trail stop not hit) offered an average return per trade of 5.1% for Research in Motion (RIMM) off 62.5% trade winners (winning trades took home 12.5%, losing trades -7.2%) and 5.0% for Free McMoran (FCX) from 67.8% winning trades (10.9% on winners, -7.4% on losers). The relatively bullish outlook for Free McMoran ran counter to the lackluster weekly performance projection for this stock.

Why not give your stocks the PatternDNA treatment?


Why not start your Zignals Trading Strategy Business with us today? Learn How to promote your Zignals Trading Business with Twitter.

Follow us on twitter here

Build a trading strategy in Zignals and potentially earn money too; download our Build a Trading Strategy PDF and get selling (and trading) today!

Dr. Declan Fallon, Senior Market Technician for, offers a range of stock trading strategies via his Zignals home page. Each Zignals member has an unique home page which they can share with friends and clients to sell their strategies.

Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on


blog comments powered by Disqus