Currently developing and testing a mean reversion strategy for range-bound markets. Still work in progress, but using a simple setup of defined price band, low ADR value, RSI overbought/oversold and MACD indicating chance of reversal. Stop is 2x ATR.
Rally has moved to range-bound market on weekly chart since September 24. RSI near 70 on the daily, and although MACD looks slightly bullish, volume behind this latest move towards the upper channel line doesn't seem strong enough.
Short position near channel line with a tight stop (c. 1.0x ATR). Target is lower channel line, and if breakout to the lower side...
For my first trade of the year, I will take a stab at ASML.
The share has failed to break through an established resistance (red line), and MACD and price action suggest a bearish move. My profit target is 608, close to the next support I identified (green line). My stop will be just over the resistance line, resulting in a 2R target for this trade.
Happy New...
