$SMH upward mean reversion incoming…
Updated
SMH:1D
Signal sitting just above the -3SD (136.46) and needs to reverse trend in order to maintain the strength of the longterm linear regression trend at 0.91 Pearson R^2. Given the strength of the multi-year trend, an attempt at an upward mean reversion to the 161.17 price region is not unreasonable to expect going into the end of the year.
I would expect resistance at the 0.5 Retrace (148.69) to the upside and trend could withstand a move down to the 1.382 (132.93) before trend began to ‘shatter’.
We have a minor bullish price/RSI divergence with price printing lower lows and RSI printing higher lows.
Price correlation to
SPY over the last 50 trading days is very strong at 0.88. Returns correlation to the SPY over the last 50 days is relatively strong at 0.82 with a beta of 1.43X the broader market (SPY).
NOT FINANCIAL ADVICE. ALL STOCKS CAN GO TO ZERO.
Signal sitting just above the -3SD (136.46) and needs to reverse trend in order to maintain the strength of the longterm linear regression trend at 0.91 Pearson R^2. Given the strength of the multi-year trend, an attempt at an upward mean reversion to the 161.17 price region is not unreasonable to expect going into the end of the year.
I would expect resistance at the 0.5 Retrace (148.69) to the upside and trend could withstand a move down to the 1.382 (132.93) before trend began to ‘shatter’.
We have a minor bullish price/RSI divergence with price printing lower lows and RSI printing higher lows.
Price correlation to
SPY over the last 50 trading days is very strong at 0.88. Returns correlation to the SPY over the last 50 days is relatively strong at 0.82 with a beta of 1.43X the broader market (SPY). NOT FINANCIAL ADVICE. ALL STOCKS CAN GO TO ZERO.
Trade closed: target reached
Target of 161.17 reached and upward mean reversion complete!
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