AMD PARABOLIC SELL SIGNAL!! SHORT to $106.28
This trade is a setup with >80% SUCCESS RATE in my experience. I have come up with this setup and I dont think this is described anywhere else. So I am letting everyone see some of my proprietary trade signals. Its an adaptation of Bollinger Band reversion to the means rule. This rule is designed to show where price has runaway and is WAY OVERVALUED and MUST revert to the means. In this case I use the 39 EMA as the Mean average. That becomes the Target Price of the expected move.
The PARABOLIC SELL signal is setup with Price TOUCHES or GOES BEYOND the outer Bollinger Band which is 2 STD DEV beyond the means. The price MUST reach that outer band a MINIMUM of 5 times. Each count (1-5) MUST not be interrupted by more than ONE candle that does not touch the outer band. In this example AMD Price TOUCHES or GOES BEYOND 6 times in a row with NO interruptions. But, my rule allows for one interruption between each count at a MAXIMUM. If there is MORE than 1 interruption then the count begins again. AFTER the 5th count if price retraces 50% of the last candle height then a SELL signal is initiated.
As you can see on this 3 DAY chart of AMD we have a PARABOLIC SELL signal after a 6 count where price has retraced 50% of that candle.
Next, my rule says to place the SHORT LIMIT order somewhere between the prior candle close and most recent high (usually that same candle high), with a SL just above the most recent high. Target Price is the 39 EMA.
So in this case my SELL LIMIT order is at $151.58 with SL at $157.28. Downside TP = $106.28. This is a 7.95 R Trade. That means that this trade could LOSE almost 8 x and still be break even. This rule is NOT 100% but it is successful >80% in my experience trading it. Also the longer the TF the more relaible the Signal. This is a 3D Chart. It works nearly 100% on Weekly charts. So I would expect about a 90% chance this trade is successful (assuming my Limit Order gets filled)!! (sometimes the order does not fill)
I hope this helps someone learn something. Lets see if it plays out as expected. The last time I described this was MRNA SHORT and SPX SHORT about 1.5 years ago. BOTH trades worked as described. The same setup actually occurred in TSLA yesterday but I failed to see the setup to take that trade.
Trade what you see!!
The PARABOLIC SELL signal is setup with Price TOUCHES or GOES BEYOND the outer Bollinger Band which is 2 STD DEV beyond the means. The price MUST reach that outer band a MINIMUM of 5 times. Each count (1-5) MUST not be interrupted by more than ONE candle that does not touch the outer band. In this example AMD Price TOUCHES or GOES BEYOND 6 times in a row with NO interruptions. But, my rule allows for one interruption between each count at a MAXIMUM. If there is MORE than 1 interruption then the count begins again. AFTER the 5th count if price retraces 50% of the last candle height then a SELL signal is initiated.
As you can see on this 3 DAY chart of AMD we have a PARABOLIC SELL signal after a 6 count where price has retraced 50% of that candle.
Next, my rule says to place the SHORT LIMIT order somewhere between the prior candle close and most recent high (usually that same candle high), with a SL just above the most recent high. Target Price is the 39 EMA.
So in this case my SELL LIMIT order is at $151.58 with SL at $157.28. Downside TP = $106.28. This is a 7.95 R Trade. That means that this trade could LOSE almost 8 x and still be break even. This rule is NOT 100% but it is successful >80% in my experience trading it. Also the longer the TF the more relaible the Signal. This is a 3D Chart. It works nearly 100% on Weekly charts. So I would expect about a 90% chance this trade is successful (assuming my Limit Order gets filled)!! (sometimes the order does not fill)
I hope this helps someone learn something. Lets see if it plays out as expected. The last time I described this was MRNA SHORT and SPX SHORT about 1.5 years ago. BOTH trades worked as described. The same setup actually occurred in TSLA yesterday but I failed to see the setup to take that trade.
Trade what you see!!
Note
SELL Limit Order did not fill today. Oftentimes there is a pullback and then another leg higher to test the most recent high. THAT will be the opportunity to SHORT. Keeping my SELL Limit Order at $151.58. If it does not fill, move on to next trade. I REFUSE to chase price no matter how certain I am that my TP of $106.28 will be reached. NO FOMO!!Note
Trade still not Active. Waiting for SELL order to fill. Hopefully soon.NO Changes
Trade active
SHORT Limit order filled today at near the high of the day. $151.58Note
SL = $157.28 as described aboveTrade active
I saw price spiking higher today and then momentum slowing on lower TF. So I ADDED to my Position. Now I have a FULL Position on with Average SELL Price @ $152.26. Lets see if she plays out as planned.Trade closed: stop reached
Trade Failed... Stopped out. Rare occurence with this setup.Note
I hope I didnt get my SL to hit and then the trade works out. That would SUCKNote
I have reevaluated this trade and still feel it has merit. I have decided to enter a NEW entry on trend line break and a price below the 3 day low candle. That low is at $152.56 currently.Entry = SELL STOP Limit Order @ $152.36
SL = $161.37
TP = $112.76
R = 4.41
Note
I have just reevaluated this chart over many years and on all time frames from Daily, Weekly, to Monthly. There have been 3 or 4 instances in AMD price history over last 20 years that has been similar setup to the current one. ALL of those setups resulted in a MINIMUM 30% retracement and most of those actually retraced 50% or more to the 200 EMA or LOWER which in THIS case is at $101.72. $101.72 is a 30% retracement from here but I am callling for a conservative drop to the $112 level. Also in ONLY 1 of those peaks did one of my signals have a higher overbought reading. So this is the 2nd most overbought AMD has ever been based on that reading. Another metric I looked at is how many STD DEV price has been beyond the 20 MONTH Moving Average. Currently, Price is MORE than 2.5 STD DEV away from the 20 MONTH MA of price which sits at $88.42. IN EVERY OCCURRENCE the MONTHLY PRICE reached MORE THAN 2.5 STD DEV beyond the 20 MONTH MA of Price then the price has retraced to THAT 20 MONTH MA each and every time. That would give us a downside price target of $88.42 which is nearly 50% drop from here.
I am MOST DEFINITELY putting on a SELL order for Monday mornig to SELL SHORT the moment price drop at or below $152.36 which ould be a parabolic trend channel trend line break and a price below 3 day low providing 2 MORE SELL signals. I plan to take a FULL POSITION on this trade at that tie and not planning on scaling in.
If I am wrong so be it,...I am wrong and will accept my loss and move on. BUT probabilities STRONGLY favor my trade idea and I will take this trade each and every time as 80% of the time this is a winner.
Note
Looks like a BIG Reversal today,....WILL My Trade play out as expected??...Price closed very near the LOW of the Day. Low was $152.39 and SELL order was at $152.36. So not filled yet.
Beacuse of that I plan to RAISE my SELL Limit order to get a better price as I think todays price action shows that TL support has been broken and rallys are for selling.
New order will be SELL Limit Order @ $ 154.45
Trade active
AMD Gapped lower at the open today so I had to adjust my SELL Limit order to get it filled on the morning rally. SHORT @ $152.36.So far so good. Let see what happens
Trade active
Trade still active. No changes despite the rally. I still have downside target at same spot. Let's see what happens. SL still at $161.37. If it gets hit this time I will likely not reenter the trade. Again, 80% probability is not 100% probability. Trading is all about playing probabilities in our favor. Probabilities favor retracement so I will remain positioned that way until proven otherwise.Note
Better day today for my trade. Need more follow through. Lets see what happens next week.Note
Stocks opening up big tonight along with crypto and I suspect 
USD will be rejected off major resistance all of which should be adding to fuel the next Stock Market rally. If that happens we may get stopped out of this SHORT Trade. We will see how the market trades tomorrow but it is possible this turns out to be a failed setup again.We also could see people rotating out of overvalued positions into other undervalued positions like crypto and precious metals and Uranium,....alll other trades I am in LONG. If that happens then we still could see AMD SHORT play out as people take profits. So lets see how the market treats AMD tomorrow. Price action will be important for the next several days especially as we start a new month on Wednesday.
Trade closed: stop reached
Stopped out today. So I have lost on this trade. Did not work as planned. But I know that this trade setup has 80% WIN Rate with >3R return when I WIN. This type of trade is one I will take EVERYTIME. You can not WIN unless you are in the trade. I am not one of those people calling tops all the time. I do not SHORT in an UPTREND EXCEPT in this scenario where price is extremely overbought and due for correction based on certain signals. The signals were there so I took the trade and will do so again in the future.
Note
I am SERIOUSLY cosidering reenetering this trade AGAIN. There is more and more BEARISH signals in the overall stock market and this chart is continuing to show MORE Bearish signals. In fact I am expecting a few more SELL signals that I use to trigger today or tomorrow. For now I am still out of this trade as 2 failed trades. I am NOT one to call a top. I am NOT a believer that AMD is a terrible company. I AM someone that believes that EVERYONE that wants this stock has bought it and it is SEVERELY overvalued and SEVERELY Overbought. A parabolic move to these levels this quickly needs a reversion to the mean before moving higher. For now I am still out of this trade. I will update if my plans change.Finally, I woould like to point out that I have been doing this long enough to know that when I get ridiculed on here by the naysayers of TA to say that "the FUndamentals this or that and that I dont have a clue"....well THAT in and of itself is a SELL signal to me. When the people that have little real knowledge of trading tell me those things and that this will "gap up" and blast to $200 after a rather LONG parabolic move THEN I know everyone is LONG and as the old saying goes "Be FEARFUL when others are GREEDY and Be GREEDY when others are FEARFUL."
In addition to my comment above I will also say that AMD is also forming the Parabolic SELL Signal on the WEEKLY Chart which is even MORE reliable than the 3D chart. I will wait for further confirmation but I dont think this trade is necessarily over for me yet. Lets see what happens and I will try to pick my entry a bit more wisely IF I enter again.
Trade active
Entering SHORT with a Small position as this stock is severely underperforming the sector and Tech in general today. Entry Price SHORT @ $159.08.Note
ADDED to Position with now a full position SHORT. Last entry was SHORT @ $155.67.Trade active
So FINALLY it appears that my trade setup is coming to fruition. I lost 4% on 2 failed trades when I was stopped out each time. (2% loss of capital on EACH trade). But I made up that and then some on TODAY'S price action alone!!Been doing this too long to listen to some of these bozos that like to ridicule when they clearly have no idea how to trade. I am not 100%,...no one is. But I sure do not stay on the wrong side of a trade too often or for too long.
Staying SHORT here!!
Note
THREE SELL SIGNALS today in AMD prompting my SHORT Again!!.1) Price broke below rising wedge support
2) Price broke below yesterdays low
3) ADX dropped 15% from Peak of 69.48. That is an indiaction the current Trend MOVE ENDING. Also when ADX is above 60 it indicates the move is also reaching its end. So I wait for the reversal SELL signal as described. Current ADX is 57.1
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NOt much change today. AMD underperforming NVDA today and the broader stock market. There was no one really "Buying the Dip" today. I expect further downside.Remaining SHORT. NO changes
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Another GOOD Day. This trade has recovered my entire losses from the 1st 2 fails where I got stopped out and now has made that entire amount in unrealized profit so far. I still fully expect this trade to be closed as I cover my SHORT at or around $110. The WEEKLY chart showed a PARABOLIC SELL Signal with a TP of $107.78. This original SELL on 3 D chart was $106. So somewhere below $120 and probably below $112 I will look to cover the SHORT.
I am expecting us to test the $137 - $138 level as we bounce off EMA 39 on Daily chart and also a horizontal support line. I expect that will be short lived as we meet trendline resistance and drop further toward the TP around 108ish.
(See Yellow Arrow on Chart)
Note
Although crypto and stocks are not 100% correlated the crypto market has USUALLY led the stock market on direction. Crypto took it on the chin last night.. Both crypto and Tech stocks are low interest rate and higher risk and higher return trades. They do well when interest rates are low and risk appetite is HIGH. Right now it appears crypto is taking a dump and that along with MANY other Bearish Signals I am seeing in Stocks as well as recent news events of Omicron and Evergrande now saying they are finally running out of money has all led me to believe this drop in stocks will not be short lived.I am expecting SIGNIFICANT Volatility and probably surprising drops in stocks soon. That means this trade is looking more and more like it could reach the $106-$108 TP I mentioned. I have one other TP lower at ~$88 on a Monthly chart but I will not say we will reach that yet. Let's see how this trade plays out. Let's get to <$120 on AMD and then I'll update that TP.
Note
Trade going exactly as expected at this point. Hard to believe that it took nearly 1 month for it to work out from my original posted Trade Idea.I am expecting a bit of a bounce in the next day or so and probable retracement to the $148 level (as indicated in the yellow zig zag line drawn in yesterdays chart. Today's price action dropped below the EMA 39 and then ended the day $1 above that price. The price action late in the day saw some buying as the lower wick of todays candle shows.
Staying SHORT here. I am actually contemplating ADDING to this position when we get to the $148 level. Will reevaluate as Price Action unfolds in the coming days and make a decision there.
Note
Price bounced at support as I expected and discussed in yesterdays post.Following the Yellow zig zag almost exactly. I expect a bit more upside and probably some ridicule from the naysayers telling me that we are heading back to new ATH in AMD. Although that is possible I think too much damage has been done to all charts and markets in the last couple of weeks that repair of that chart damage will not happeen in a day or 2.
I plan to remain SHORT untll stopped out or my TP is reached or until this trade looks to be ending. Today AMD Price Action showed real weakness compared to NVDA and Tech in general in my opinion so there is no reason to cover this SHORT.
NO Changes.
Note
Today's price action shows that this trade is still worthy to stay SHORT. NASDAQ was up 0.9% and this (one of the best performing stocks in the NASDAQ over the last several months) underperformed the other tech stocks. Also Price rose to $147.04 which is the lower end of the resistance zone I mentioned between $147-$148. So we possibly will have further upside and test of that resistance tomorrow and/or Friday. I am expecting a continuation of the drop toward TP of $106-$108 sometime next week.NO Changes.
Trade active
We seem to have retested the 147ish level and Price was rejected there making a new low below yesterday's low of $142.70. I was not watching markets at that time but THAT is another SELL signal. I did not ADD to my position but I am well into profit on this trade. I fully expect us to reach TP or very close to it. DOWN 3% today Staying SHORT. NO Changes for now.
Trade active
This is the only trade I have on right now. I remain in cash except for this SHORT position in my trading account.Trade is going as planned. So far I have nearly 6R return on my investment. (I risked 2% on this last trade and I am up nearly 12% in my entire account.) However, I did take 2 failed trade entres that were stopped out for 2% loss each totaling 4% loss. With 12% gain I still have a net 8% gain during this volatile time and downward move in the markets.
I see no reason we will not reach the TP outlined above. Possibility of a little bounce tomorrow to close out the week (new zig zag yellow line).
SELL Signals all over the place for AMD.
1) Break below yesterday's Low
2) Closing price below EMA 39 with EMA 39 now curling downward
3) MACD pointing down and MACD Histogram bars becoming more and more negative in height indicating that SELL momentum is getting stronger!!
STAY SHORT. No Changes
Trade active
Making Bank on this trade!!. Today's Price action was quite telling that this trade will ALMOST CERTAINLY reach my TP. Today's price action shows a fakeout higher and then big selloff to close at almost the absolute low of the day. In addition today's close was lower than yesterdays low AND it was lower than the wick low of 12-6-2021. Today's entire candle also got rejected off the EMA 39. Finally, the MACD Histogram is getting deeper and deeper (more and more negative) showing increasing SELL Momentum. Breaking below these key levels with increasing momentum does not suggest that this move will end anytime soon. HIGH Probability still favors a break of the next lower support at $127.56. The next lower significant support below that is $112.76, which happens to be Take Profit level.
I have Take Profit order in place at $112.67 because that is the top end of my TP Zone and that is also a good long term support area wherw I would expect there to be a significant bounce. I have not decided yet if I will close this entire position or only Take Profit on a portion. I plan to watch the Price Action as we get closer to finalize that decision.
Trade closed: stop reached
Trade closed at substantial profit but not at TP. I still think this will reach TP but I am not willing to wait given todays reversal and trendline break higher and MACD curling higher all indicating sentiment has changed and for the time being AMD may retest highs.Stopped out at $141.31.
Note
Trade closed manually
So I didnt update this post for a while after I saw a retracement coming and now just for the record....TARGET hit almost to perfection. Todays low was $107.50.For all the naysayers,...this chart and target price was called in November 2021.
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