Why I'm ignoring technical chart and buying SOXL after hours
Trading View's technical chart is flashing a sell signal for SOXL, but my proprietary algorithm is saying buy.
These indicators are flashing strong buy:
These indicators are flashing a weak sell:
This indicator is flashing a fairly strong sell:
My proprietary algorithm aside, there's also seasonality to consider. Today is a "bear day" according to the Stock Trader's Almanac, meaning that on this date the market historically has fallen more than 60% of the time. However, the next week and a half have historically been bullish. So historical patterns suggest that today's decline was an anomaly and that the market will rally tomorrow or Friday.
As always, this is just an idea about how the market may move, not investment advice.
These indicators are flashing strong buy:
- Slope of the Hull moving average
- Previous day's change
- Difference between 20-day exponential moving average and 20-day simple moving average
These indicators are flashing a weak sell:
- 20-day simple moving average slope
- Distance from Hull moving average
This indicator is flashing a fairly strong sell:
*Distance from 20-day exponential moving average
My proprietary algorithm aside, there's also seasonality to consider. Today is a "bear day" according to the Stock Trader's Almanac, meaning that on this date the market historically has fallen more than 60% of the time. However, the next week and a half have historically been bullish. So historical patterns suggest that today's decline was an anomaly and that the market will rally tomorrow or Friday.
As always, this is just an idea about how the market may move, not investment advice.
Note
SOXL opened up about 2.5% this morning. I sold off half my position, because up 2-2.5% is a standard reversal zone for SOXL. It did reverse, and I repurchased my sold shares at about the original purchase price. I think yesterday's low of 127.76 will act as a support for today. If the price moves decisively below that, it'll be a tough call whether to sell or hold.Note
I held my position until the end of the day, then liquidated it for an approximately 2% profit when my algorithm flashed a sell signal. Mostly it's the weakening of the Hull Moving Average's upward slope that drove the algorithm's revised recommendation.Note
SOXL is way down in premarket trading. In my discussion of seasonality, I forgot that next week is options expiration week. Options expiration weeks follow the overall market trend. Next week is historically a bull week only because most markets are bull markets. This year we're in a bear market, especially for semiconductors, and options expiration week should follow the trend.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.