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Overbought

Microsoft Corporation (MSFT) Tends To Drop Post-EarningsMicrosoft Corporation has been trending upward as are most stocks and sectors since the U.S. elections last year. Although "good" numbers and much hype surround markets, Microsoft has not had great results after their earnings calls for the last four years. The stock is also at the top of its clearly defined trend channel which has always resulted in a decline over the next few weeks. We have laid out a study of historical movements for the stock in this article. Will history repeat itself again causing a 5% plus drop? When we look at technical indicators, the relative strength index (RSI) is at 78.4752. RSI tends to determine trends, momentum, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. The RSI is currently overbought. This milestone has occurred 112 times and its significance is discussed below. The positive vortex indicator (VI) is at 1.3159 and the negative is 0.6303. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the stock is moving down. The positive and negative are at somewhat extreme levels away from their central point of 1. Their current retreat back to 1 typically flags the end of the upward movement while signaling a drop for the stock. The stochastic oscillator K value is 94.8017 and D value is 81.1292. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is certainly in overbought territory. The D value is still well below the K value and it could be a few more days before the D is greater than the K. When this crossover occurs, the stock could be ready to drop. SPECIFIC ANALYSIS Only one other time since 2000 was the RSI and positive VI at or above today's level at the same time the stochastic oscillator was overbought with the earnings call three days away. The stock dropped 5.21% over the following 14 trading days on that occasion. The stock has dropped 12 of the last 17 times from its close price three days prior to the earnings call. Of these 12 occasions, the minimum drop is 0.67%, median drop is 4.40%, and maximum decline is 14.97%. On four occasions since the start of the Dot Com Bubble Burst has the RSI and positive VI been at the same level while the stochastic oscillator was overbought. The minimum days to hit a bottom was 14 and the minimum stock loss was 4.62%. The median stock decline was 5.81% and maximum was 16.54%. On 12 occasions the RSI and positive VI have been near their same levels are higher while the stochastics oscillator was overbought. The stock has dropped a minimum of 3.03% and median of 5.79% throughout these instances. The RSI has closed at or above its current level 112 times since 1986. Over the next 30 trading days from this point, the stock does not always drop, the median decline is 6.86% and average loss is 8.68%. Finally, the stock has been in a discernable trend channel since April 2016. The stock hit the top of this channel on Friday which it has done five other times since it began. The quickest drop from the top has occurred in three days and the slowest bottom occurred in 20 days. The minimum drop from the top of the channel is 3.23%, median is 4.79%, and max is 5.79%. Between all of the aforementioned historics, we are confident the stock could drop at least 3.5% over the following 35 trading days. The significant drop should take shape after earnings are announced around October 26. Remember, even positive earnings have resulted in declines.
NASDAQ:MSFTShort
by StockSignaler
Did ConocoPhillips (COP) Just Exhaust Itself?ConocoPhillips has climbed quickly in the previous month. The stock should not remain at such a high level according to technical indicators and historics, Will it head south with strong action around the 46 level? When we look at technical indicators, the relative strength index (RSI) is at 65.6636. RSI tends to determine trends, momentum, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI has come down from overbought levels. The historical significance of this move and it current level are detailed below. The positive vortex indicator (VI) is at 1.2097 and the negative is 0.6935. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the stock is moving down. The positive and negative have begun to head back toward the 1 level after flirting with extremes consistent with positive stock movement. A retreat back to one typically flags the end of the upward movement while signaling a drop for the stock. The stochastic oscillator K value is 90.4177 and D value is 93.3957. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is certainly in overbought territory The D value has just overtaken the K value at the time of writing; meaning the stock will continue to decline and could drop quicker than it rose. SPECIFIC ANALYSIS I have created an algorithm which signals when stocks are truly overbought and oversold. The algorithm indicates when a particular stock meets multiple criteria culminating in an oversold or overbought signal. The overbought signal could occur over the next few days. Seeing the other signs of a downturn, proactively positioning short for the stock's decline prior to seeing this verifying signal could increase profits. Upon back-testing this indicator, it has signaled overbought status 73 times dating back to 1981. The stock drops at least 2% over the following 35 trading days in eighty percent of these occurrences. The stock drops at least 3% seventy percent of the time and forty percent of the time loses 6.25%. Even though a drop does not always occur, these number combined with the following statistics have instilled confidence that a greater than 5% drop is looming. On 13 occasions since 1985, the RSI has exited overbought territory and been at its current level while the stochastic was simultaneously overbought and the positive VI was retreating from a level above it current one. This might not be a significant amount of data points, it is plenty for when studying historical movement. Based on this data, the stock sees a median drop of 12.09% over the next 20-35 trading days. Between all of the aforementioned historics, we are confident the stock could drop at least 5-7% over the following 38 trading days. A SAG gauge signal would further bolster this idea.
NYSE:COPShort
by StockSignaler
BTCUSD showing weakness on higher TF Disclaimer: this is my first idea on tradingview. Despite showing some strength in lower TFs, BTC price appears to be topping out here, as evidenced by an imminent bearish signal line crossover on the 8H MACD. I forecast a substantial price drop in the next day or so, especially since the stochRSI is also showing that it's about to go over a cliff. My plan: Looking to reload at a major support level below when multiple indicators signal a potential bounce or reversal. Alternatively, looking to buy in (possibly with a stop) if the opposite scenario unfolds and the price unexpectedly goes up. It has been a great run but all good things must come to an end. Remember, the market works in cycles, just like everything else in the universe. Bitcoin's time to shine will come again.
COINBASE:BTCUSDShort
by zycerp
1
Seven Percent Plus Drop In Cards For Ford?Ford Motor Company has climbed quickly in the previous month. Overall auto sales are in rough shape and could be this way for a while. According to the technical indicators and the historics, the stock has a good chance of coming back down to Earth which is laid out here. Ford loves to flirt around the 11 mark. Will it head back to it once more? When we look at technical indicators, the relative strength index (RSI) is at 76. RSI tends to determine trends, momentum, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI is overbought meaning the stock could drop in the near term. The positive vortex indicator (VI) is at 1.2375 and the negative is 0.7026. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action has flattened out. I could not locate similar consolidation in this stock for such a prolonged period of time. While this activity is a bit of a wildcard, the positive vortex indicator oscillates up and down as time transpires. With it staying high for a while, it is due to head downward, meaning the stock would drop at least a little (1-4%) soon. The stochastic oscillator K value is 92.15 and D value is 92.44. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is certainly in overbought territory The D value has just overtaken the K value at the time of writing; meaning the decline in the stock should begin within the next two trading days. SPECIFIC ANALYSIS I have created an algorithm (called the SAG gauge) which signals when stocks are truly overbought and oversold. The algorithm indicates when a particular stock meets multiple criteria culminating in an oversold or overbought signal. That signal occurred today which is another indicator of downward movement for the stock. Upon back-testing this indicator, it has signaled overbought status 98 times dating back to 1972. The stock drops at least 1% over the following 30 trading days in ninety percent of these occurrences. The stock drops at least 3.75% seventy percent of the time and fifty percent of the time loses 6%. Even though a drop does not always occur, these number combined with the following statistics have instilled confidence that a sizeable drop is coming. The RSI, stochastic, and positive VI have been at their current or higher levels simultaneously only three times in the history of the stock since 1979. Even though the availability of data points is low, the rarity of such a feat is the biggest signal for short-term traders to consider. Over the next 30 days, the stock always drops at least 7.19% from the date all three indicators are at or above the current levels simultaneously. The median drop over this time frame is 10.17%. If we look solely at the overbought RSI reading and its historics, the stock could drop in upwards of 8%. The RSI has been at or above its current level 139 times in its history. Over the course of the following 35 trading days, the stock retreats an average of 10.03% and a median of 8.27%. Between all of the aforementioned historics, we are confident the stock could drop at least 7% over the following 35 trading days. The best indicator is the flattening positive VI value and the simultaneously high levels of all three indicators. The SAG gauge signal and its historic information support a minimum of 3-5% drop in the near-term as well.
NYSE:FShort
by StockSignaler
1
History Says Chevron (CVX) Is Set To Decline At Least 5%Chevron has climbed quick in the previous month. This could be due to hurricanes in the United States and/or OPEC manipulation. No matter the world and economic reasoning, the technicals have a response for this overexuberant movement; the stock will begin dropping soon. The history of this stock has been studied and the information is explained below. The relative strength index (RSI) is at 80.3974. RSI tends to determine trends, momentum, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI is at an extreme level that has only occurred 26 times since 1973. The significance of this is outlined below and is the first signal of a pending downturn. The positive vortex indicator (VI) is at 1.3839 and the negative is at 0.5046. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The both values are near extremes and this in conjunction with the extreme RSI reading will be covered in the SPECIFIC ANALYSIS section below. The stochastic oscillator K value is 95.0678 and D value is 83.0602. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the D value is higher that the K value the stock is trending down. The stochastic is in overbought territory, but it could be another week before the D value is larger than the K value. In order for this crossover to occur, the stock would begin declining. We are looking to short the stock prior to this decline and more is explained below. SPECIFIC ANALYSIS I have created an algorithm (called SAG Gauge) which signals when stocks are truly overbought and oversold. The algorithm indicates when a particular stock meets multiple criteria culminating in an oversold or overbought signal. That signal will most likely occur within a few trading days after the stock has begun to move downward. Recognizing this movement and pending signal can increase profit by entering early. Upon back-testing this indicator, it has signaled overbought status 111 times dating back to 1973. Seventy percent of the time, the stock drops at least 3% over the following 30 trading days after the indicator date. Sixty percent of the time the stock drops at least 5% and fifty percent of the time loses 6.5%. Even though a drop does not always occur, taking the below information into consideration makes us believe we are in that 60% of the time range. As mentioned above, the RSI alone is at an extreme level that has only occurred 26 individual trading days since 1973. The stock always drops at least 1.58% from the date it reaches the 80.3974 level (which was just achieved on Sept 22) over the following 30 trading days. The median drop over this time frame is 5.71%, average is 6.81% and the maximum drop is 20.35%. Since 1973, this stock always drops at least 5% when the RSI is at or above its current level, while the positive VI is at or above its current level and the stochastic is in overbought territory. These conditions have only been met four times and the instances were evaluated. The median decline for the stock has been 15.08% over the following 30 trading days. On three of these four occasions, the stock continued to go up for at least 2 more trading days. This additional climb resulted in a minimum stock decline of 6.75%. Between all of the mentioned historics, I believe the stock could drop at least 5% over the following 40 trading days if not sooner. The best indicator is the simultaneous extremes that have been achieved by the RSI & positive VI. The RSI extreme alone supports this belief & the SAG helps.
NYSE:CVXShort
by StockSignaler
GBPUSD possible Divergence tradeHey, traders. Here on the GBPUSD, we have a great example of a CTS type of trade. This market is at a previous HTF level of structure. It has also gone overbought on the RSI on higher time frames. Now, that alone is not enough reason for me personally to enter a trade, but taking it down to an hourly chart, here we have a nice double top. This double top looks great but I still needed to see one more thing for entry.. Divergence. This double top is accompanied by RSI divergence. All of this combines to make a good possible trade. It is very important to remember that we have to incorporate many things into a trade, not just one entry reason, or the fact that the market is at resistance/support. In order to have optimal results as a technical trader, we must incorporate conditions along with entry reasons to create a successful strategy. Hope this was helpful. I do private ideas for FREE each week to everyone who is signed up for the email list at The Trading Channel. There is a link below to sign up for FREE. FREE private ideas: www.thetradingchannel.net FREE training: www.youtube.com
Short
by StevenH
7
Potential Short entry at GBP/USD Daily (Gartley Pattern) (11/9)If the market price goes as the same pattern as before, there is a possible market entry for sell position at GBP/USD Daily. The price potentially build a gartley pattern in combine with fib retracement + fib extention. Furthermore, the rsi and stochastic gave you a signals that the price has already in the overbought area, and potentially will go down. In combining such method,place a sell order and aim the TP1 at the 1.30284, TP2 at 1.27624 and place a SL at 1.32910. TP1 is the previous nearest support of a structure, and TP2 is the possible of D leg of gartley pattern including the price of where the 0.786 fib retracement is + mayor resistance (black line) + fibo ext of 1,272 which potentially make a D line of Gartley pattern. Good luck, and Happy trading!! ;)
Short
by fayfahry