Chicago Bridge and Iron Set To Gain 66% By OctoberChicago Bridge and Iron makes reading Elliott waves easy. Even though the stock has had a rough time of late, it was a natural movement when wave theory is applied. The stock is set to drop 20% over the next month to month and a half. Once the bottom is found, the stock should gain 66% over the next 6-7 months. More is detailed at limitlesslifeskills.
Limitlesslifeskills
Upcoming Roller Coaster For Kohl's (KSS)Putting Elliott Wave Theory To Work. I have made the first of six trades today with three planned positions over the next 3 months. After breaking down the KSS chart at a technical level, I have forecasted 3 rough price points (68.42, 61.22, 75.62).
PLAN #1
Entered first position at 63.37 on January 12
Plan to exit around 68.42 around January 18
This would be around an 8% gain
PLAN #2
Plan to short after the exit around 68.42 on January 18
Plan to exit around 61.22 on February 23
This would be around a 10.5% drop for stock
PLAN #3
Plan to enter long position around 61.22 around February 23
Plan to exit around 75.62 around April 18
This would be around a 23.5% gain
Estimate Waves 4 and 5 for ConocoPhillipsIn assuming Cycle Wave 3 topped out on January 12, we have laid out estimated points for Waves 4 and 5. Wave 5 will also end Supercycle Wave 3. We have broken it down more on our site.
Elliott Wave Projection For ConocoPhillipsWe have identified the Macro waves and pointed out the most recent minor waves. I believe we just completed Wave 3 of a Cycle Wave, as well as Wave 5 of a Primary Wave.
ConocoPhillips Is Set To Gain At Least 45%ConocoPhillips should rise at least 45% by the end of 2019 from Friday's close. Can you beat 45% gain in 20 months? In the short-term the stock should zig-zag to this point. Stock will most likely:
drop toward 55.93
rise toward 70.07
drop toward 59.75
rise toward 87.00 to close out its Elliott Wave Grand Supercycle and achieve at least a double top.
I will publish the full breakdown and track the process on my site
Disney On Final Leg Of Wave 5Still polishing my Elliott Wave reading, but looks like the ride could be over for Disney. The stock should make it to the 116-120 range before beginning its next wave. I am entering tomorrow with an exit planned in this 116-118 target range. The stock could form a double top or go higher. The only certainty is it will make it to 116 which is at least a 5% gain over the next month.
Illinois Tool Works (ITW) Will Drop At Least 3 Percent SoonIllinois Tool Works Inc has been trending up for more than two years. As the stock moves up, it naturally cycles up and down maintaining its upward bias. Some technical indicators are displaying major signals that the stock will soon drop. The relative strength index (RSI) is at a rarely observed extreme level; a combination of indicators also point out trouble on the horizon. The stock will most likely continue its upward trend over the long-term; but this next natural cycle down could impact investors. How bad will history repeat itself?
The RSI is at 84.5283 and 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 and is at one of its highest levels ever. It can only take the stock down from here. The positive vortex indicator (VI) is at 1.1854 and the negative is 0.6629. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. The opposite is true when the negative is higher.
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. The overbought signal recently occurred and could occur again 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 104 times dating back to 1980. The stock drops at least 1.75% 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 5.75%. Even though a drop does not always occur, these numbers combined with the following statistics have instilled confidence that a greater than 2% drop is looming.
The RSI has been at or above its current level ONLY seven times in the history of this stock. The stock always drops over the next 25 days with a minimum drop of 0.93%, median decline of 2.52%, and average drop of 4.58%.
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 technical indicators for this stock have been in the same or more extreme positions simultaneously only three times in the history of the stock. These all occurred more than 30 years ago. The minimum drop was 9.33% over 16 trading days while the median was 12.82% over 33 trading days.
Although not identical to the current technical readings, ten similar instances saw the RSI close to today's 84 reading while the positive VI was at or above its current position, the negative VI was at or below its current position and the stochastic oscillator was overbought. On these occasions the stock dropped at least 4.49% and saw a median loss of 9.72%.
Another odd thing has just occurred regarding the positive VI value. It was recently above its current 1.18 level before it dropped below 1 and moved back above 1.18. Although a move like this is normal, the positive level never crossed below the negative VI level. This similar movement has only occurred on five occasions. The minimum loss for the stock was 7.34% and the median drop was 8.50%.
It is clear the stock will drop at least 3% over the next 40 days after taking all of this historical information in to consideration. I would not be surprised if the stock lost greater than 5% over this time period. The RSI for the stock is at one of its highest recorded levels ever which indicates there is only one direction for the stock to move. More at LimitlessLifeSkills.com
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.
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.
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.
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.
Technical Double Top Could Lead to JP Morgan Chase (JPM) DropJP Morgan Chase & Co recently achieved a double top pattern. This pattern is a significant technical signal that normally sends the stock down to a common level of support. The double top and other technical indicators are detailed below. JP Morgan Chase has been in a long term bull trend and will most likely continue after the stock drops.
When we look at technical indicators, the relative strength index (RSI) is at 55.7791. 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 neutral and has been moving downward. It is roughly at the same level it was last time a top was reached. This lead to a continual decline for the RSI and the stock. This is the first indication of likely downward movement in the short-term.
The positive vortex indicator (VI) is at 0.9785 and the negative is at 0.9991. 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 positive and negative levels have been moving in a manner consistent with downward movement for the stock The negative indicator has been rising at the same time the positive has fallen. They have just passed each other which will lead to a continual decline for the stock. Once again, this indicator is roughly at the same level it was when the last top was declining. This is the second indication of likely downward movement in the short-term.
The stochastic oscillator K value is 63.1339 and D value is 76.4461. 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 departing overbought territory which tends to lead to a decline for the stock. This is the third indication of likely downward movement in the short-term. This indicator is also near the same level it was as the last top was declining.
SPECIFIC ANALYSIS
The first top occurred in early March. The stock proceeded to drop 13.13% over the next 62 trading days before rising again. The light blue line across the chart represents 86.56 which has been a commonly hit mark for the stock in its recent uptrend. The aforementioned top to this level took 14 trading days to occur and resulted in a 7.90% drop.
Since the stock first broke above the 86.56 mark in December 2016, that line was in a trading day's range 43 times. That is 30% of the previous 144 trading days. This common level will most likely be hit or provide support for the stock over the following 41 trading days.
The final level studied which is most strongly dictating my conservatively placed projection is a Fibonacci retracement. According to Investopedia, "Fibonacci retracement is created by taking two extreme points on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.". A 61.8% retracement from the bottom to the top of the recent vertical distance marries up exactly with the 86.56 level. If the stock were to give back 100% of its most recent movement (May 31 low of 81.64 to July 6 high of 94.51) the stock would drop to 81.64. This is the fourth indication of likely downward movement in the short-term.
Considering the RSI, VI, stochastic levels, and recent movement from the last top, the stock should see downward movement over the short to intermediate time period. Based on historical movement compared to current levels, the stock could drop at least 5% over the next 29 trading days if not sooner.
S&P 500 Look Out Below!The last time the RSI moved down to 38.52, briefly moved up, but returned to 38.52 was near the end of 2015. The index dropped 9.75% from the close on December 18th of that year to the eventual bottom. A 10% correction occurred by the time the bottom was found from the its most recent high.
We are more than aware this bull and rally is due to correct. Is it finally upon us? Today the RSI repeated the movement mentioned above. A similar 9.70% drop from today's close would bring the index to around 2195. The index made its last record high on August 8th. A 10% correction from 2490 would be around 2242. If we repeat the 9.75% drop as previously mentioned, this will clearly be a 10% correction for the index.
Not so fast! Before 2242 or 2195 can be met, there are other stronger levels of support that must be breached first. My first level of focus is at 2401. If the index breaks below this level, we are on our way to the next major support level at 2310. Only when 2310 is breached should we consider continued movement to the aforementioned 2242 and possibly 2195 levels.
In my opinion, valuations are high and overall EPS is meager. I have been a bear for over six months which has kept me away from major gains. However, I have not lost anything as I laid in wait. You only take losses when you close your positions. If you miss out on a rally, but did not enter it, you lost nothing. I have been waiting for shorting signals, which I believe are finally seeing the light of day.
I have puts on SPY and QQQ, while buying calls on the VIX when it was trading sub-8. The VIX could only go one direction when it was below 8. All of this waiting is finally paying off. Will it pay off for you?
NASDAQ 100 not done droppingAlthough the Nasdaq 100 is the only index that did not drop below the lows seen last week, the 50 and 60 day moving averages have crossed each. Last time this cross occurred the index dropped around 3.75% and fell in line with a supporting trend line. a 3.75% drop this time is around the 5595 level, however a trend line is not near. The previous 50 day cross below of the 60 seemed to find support at the 150 day moving average. This could occur again around 5595. However, the most likely trend line would be around 5490. If the Nasdaq 100 fails to break above its current resistance trend line, 5595 and maybe 5490 are very possible
NVDA Set To DeclineNVDA has been trending down since before their earnings call. Even though the drop might not be significant, I am using trend lines and Fibonacci levels to determine a minimal drop. The most likely drop that conforms with the trends and Fib retracement levels is at least to 160.82. If it goes beneath this level and below the trendline, A more significant drop would be in the making. It is possible the stock could drop further to 147.07. Anything beyond this should be (but probably won't) a major red flag for traders.
Imminent Drop Ahead For Applied Materials (AMAT)Applied Materials, Inc. has been dropping suddenly when the positive vortex indicator (discussed below) reaches its current level. This pattern has occurred seven times dating back to December 2015. It could be coincidence and/or it could be a great opportunity to haul in large gains with put options.
The positive vortex indicator (VI) is at 1.2955 and the negative is at 0.6028. 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 positive value has begun to retreat and the significance will be covered in the SPECIFIC ANALYSIS section below.
The stochastic oscillator K value is 92.8307 and D value is 59.4358. 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 has been moving wildly since the stock lost greater than 9% in June. Currently the stock is approaching overbought levels, but both the K and D may not make it to this point before the stock tumbles again.
SPECIFIC ANALYSIS
Every time the Positive Vortex Indicator value reaches its current level, the stock drops a sizeable amount on the following trading day. In this case, the stock could drop more than 3.5% on Monday July 24, 2017. The observed pattern requires the positive VI value to break above 1.2955 and later retreat below this level. The day of the retreat is the signal, and the following day produces the loss.
Two examples are visible on the chart above with a light blue vertical line. The vertical line represents the day the positive VI value retreats below the 1.2955 mark. As you can see, the day after is always a down day, and a sizeable drop at that. You should be able to scroll to left of the chart above and view all seven instances as they are marked with the same light blue vertical line. The percent lost on these days following the crossing of 1.2955 has been: 9.30%, 3.79%, 7.24%, 1.95%, 1.75%, 3.35%, and 3.26%. That is a minimum loss of 1.75% and median loss of 3.35% with a standard deviation of 2.82%.
Furthermore, most of these one-day losses are just the beginning of greater losses. Five of the instances led to greater losses that spanned between 15-28 days. All of the following losses are based on the close price of the retreat date to the low price on the final day of decline. The minimum decline for all seven instances was 3.50% with a median loss of 7.30%.
The possible movements for the next few weeks are indicated above. The stock could drop to the horizontal light blue line (45.17) at some point on July 24, 2017 or within the next few days. The median movement is the orange rectangle on the chart. If median movement from the previous occasions is achieved, the stock could drop to 43.41 within the next 14 trading days. My conservative pick for movement is a drop to 44.23 within the next 25 trading days. Any of these levels would be significant, but another one day greater than 1.75% would keep this interesting pattern alive.
Considering the information above and recent patterns, the stock should see downward movement over the short to intermediate time period. Based on historical movement compared to current levels, the stock could drop at least 5% over the next 25 trading days if not sooner.
Buy This Costco (COST) Dip Before It Shoots UpCostco has been in an overexuberant decline since news of the Amazon and Whole Foods merger. Fortunately, this decline in the stock has brought it in-line with recent support levels and should begin to move upward once again. The stock has been in a consistent bullish trend since 2010. The recent decline seems to be part of the natural cycle for Costco. This cycle points upward next and also has other factors correlating to this move. On multiple occasions through the long bull trend, three of the technical indicators discussed below have been at similar levels in which they are now. These instances have resulted in gains for the stock. I have also conducted further analysis based on other historical information and readings that confirm a pending gain for Costco which are laid out below.
When we look at technical indicators, the relative strength index (RSI) is at 30.7171. 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 moving upward from recent oversold levels.
The positive vortex indicator (VI) is at 0.7644 and the negative is at 1.1780. 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 positive and negative levels have been moving in a manner consistent with upward movement for the stock The stock and indicators had been bearish for the past three weeks, but that trend is starting to end.
The stochastic oscillator K value is 5.0897 and D value is 6.4898. 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 well oversold and the stock should begin to move upward soon.
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 will occur within a few trading days after the stock has begun to move upward. Recognizing this movement and pending signal can increase gains by entering early.
Upon back-testing this indicator, it has signaled oversold status 25 times dating back to 1986. The stock always gains at least 0.75% over the following 35 trading days after the indicator date. Eighty percent of the time the stock gains at least 8.75% and seventy percent of the time gains 9%.
Since 1998, this stock always gains a minimum of 1.76% when the RSI, positive and negative VI are simultaneously at their current level and moving in their current direction. This additional study requires the stochastic at the bottom of the chart above to be oversold as it is today too. Ten similar instances were found. The median move is 15.20% over 20 trading days. The last two times the stock bounced off its support line (which it did on July 11), the stock has achieved a minimum gain of 8.30% over the following 22 trading days.
Three of the ten instances we just covered occurred at the same time or within days of an oversold signal on the SAG gauge. These instances resulted in a minimal gain of 6.10% and median of 16.25%.
Considering the RSI, VI, stochastic levels, SAG gauge and historical similarities, the stock should see upward movement over the short to intermediate time period. Based on historical movement compared to current levels and the SAG gauge, the stock could gain at least 6% over the next 35 trading days if not sooner.
History Sets Up Bearish Drop For Aetna Inc (AET)Aetna Inc has been in a bullish trend since 2007-2008. It has been in a steeper, and narrower bullish trend for the past four months. On multiple occasions through the long bull trend, three of the technical indicators discussed below are at similar levels that they are at now. These instances have resulted in short-term losses for the stock. I have also conducted further analysis based on other historical information and readings that confirm a pending drop for Aetna Inc which are laid out below.
When we look at technical indicators, the relative strength index (RSI) is retreating from overbought but has been relatively neutral moving for the last month. The positive and negative Vortex levels have been moving in a manner consistent with downward movement for the stock, but haven’t bearishly crossed each other since March.
The stochastic oscillator K value is 83.1080 and D value is 87.5589. 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 overbought, but has remained near the levels for the past few weeks.
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 which culminates in an oversold or overbought alert. That signal occurred June 26 as AET is truly overbought.
Upon back-testing this indicator, it has signaled overbought status 104 times dating back to 1977. The stock always drops 0.14%, which is not much, but it is something. Eighty percent of the time the stock drops at least 2% over the following 35 trading days after the indicator date. Seventy percent of the time, the stock drops 2.5% and fifty percent of the time drops 5%.
Since 2007, this stock always drops a minimum of 7.63% when the RSI, positive and negative VI are simultaneously at their current level and moving in their current direction. This additional study requires the stochastic at the bottom of the chart above to be overbought as it is today too. Ten similar instances were found going back to 2007. The minimum move occurs over 9 trading days resulting in a drop of 7.63%. The median move is 11.08% over 33 days.
Three of the aforementioned instances occurred at the same time the SAG gauge signaled overbought. The minimum days of movement and percentage dropped are outlined in the chart above with a orange rectangle (18 days, 8.51%). The median movement and percentage are represented by the light blue rectangle (28 days, 10.08%). This identical scenario is possibly playing out again. I do not fully trust three data points, but I will not ignore it either.
My conservative projection is dictated by the accuracy of the SAG gauge, identical situations disregarding the SAG overlaps, and identical situations when the SAG fires overbought when the RSI and VIs are at their current levels. The respective minimum drops are 0.14%, 7.63%, and 8.51%. The respective median drops are 5%, 11.08%, and 10.08%. I am confident the upcoming drop will rest between a 5-10% loss over the next 35 trading days.
A solid drop over the next few days is required for the full drop to take effect. A failure to pass the new healthcare plan by Congress prior to the upcoming recess could be this catalyst. Considering the RSI, VI, stochastic levels, SAG gauge and historical similarities favors a move to the downside. Based on historical movement compared to current levels and the SAG gauge, the stock could drop at least 8% over the next 35 trading days if not sooner.
Bearish Movement Ahead For Dow Chemical (DOW)Dow Chemical has been in a bullish trend since 2009. It has been in a narrower bullish trend since January 2016. On a few occasions through this trend, three of the technical indicators discussed below are at similar levels that they are at now. These instances have resulted in short-term losses for the stock. I have also conducted further analysis based on other historical information and readings that confirm a pending drop for Dow Chemical which are laid out below.
When we look at technical indicators, the relative strength index (RSI) is at 50.1024. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI is neutral having been moving down with the stock. The positive vortex indicator (VI) is at 0.9986 and the negative is at 0.9208. The positive and negative levels have been moving in a manner consistent with downward movement for the stock. The stochastic oscillator K value is 69.1107 and D value is 82.6903. 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 beginning its downward movement from overbought levels.
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 which culminates in an oversold or overbought alert. That signal occurred June 21 when DOW was truly overbought.
Upon back-testing this indicator, it has signaled overbought status 99 times dating back to 1972. Eighty percent of the time the stock drops at least 2.5% over the following 35 trading days after the indicator date. Seventy percent of the time, the stock drops 3.5% and fifty percent of the time drops 5.75%.
Since 2011, this stock always drops a minimum of 3.93% when the RSI, positive and negative VI are simultaneously at their current level and moving in their current direction. This additional study requires the stochastic at the bottom of the chart above to be overbought as it is today too. Eight similar instances were found going back to 2011. The minimum days of movement and percentage dropped are outlined in the chart above with a yellow rectangle (9 days, 3.93%). The median movement and percentage are represented by the light blue rectangle (23.5 days, 8.95%).
One of the occasions above, the SAG gauge fired the overbought signal two days prior to the RSI, VI, and stochastic lining up. This identical scenario is possibly playing out again. I do not fully trust one data point, but I will not ignore it either. On this occasion, the stock dropped 17.76% over the following 13 trading days.
The final level studied which is most strongly dictating my conservatively placed projection is a Fibonacci retracement. According to Investopedia, "Fibonacci retracement is created by taking two extreme points on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%." The 61.8% retracement level from the bottom to the top of the most recent movement falls within all of the potential movement windows. If the stock were to give back 100% of its most recent movement (May 18 low of 59.29 to June 19 high of 65.47) the stock would drop to 59.29. 61.8% of this movement would have the stock drop to 61.65 which is where my projection lies.
Considering the RSI, VI, stochastic levels, SAG gauge and historical similarities favors a move to the downside. Based on historical movement compared to current levels and the SAG gauge, the stock could drop at least 2.87% over the next 35 trading days if not sooner.
Overbought Johnson & Johnson (JNJ) Set To Drop 4%Johnson & Johnson has been in a bullish trend since 2009. On a few occasions through this trend, three of the technical indicators discussed below are at similar or higher levels, than they are now. These instances have resulted in short-term losses for the stock. I have also conducted further analysis based on other historical information and readings that confirm a pending drop for Johnson & Johnson which are laid out below.
When we look at technical indicators, the relative strength index (RSI) is at 86.2704. 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 well overbought and it one of its highest levels ever recorded for this stock.
The positive vortex indicator (VI) is at 1.3091 and the negative is at 0.5914. 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 positive value is relatively high and is beginning to slow its upward movement. This slowing momentum is an additional signal the stock should turn downward soon.
The stochastic oscillator K value is 93.2126 and D value is 92.3311. 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 very overbought. It cannot sit at this level much longer. Once the K value crosses below the D, the stock should begin to drop.
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 which culminates in an oversold or overbought alert. That signal will occur within the next few days once the stock sees two days of consecutive drops. Because this signal will go off after continued drops, now is the best time to enter a position and take greater advantage of the pending downward movement.
Upon back-testing this indicator, it has signaled overbought status 139 times dating back to 1970. Eighty percent of the time the stock drops at least 1% over the following 30 trading days after the indicator date. Seventy percent of the time, the stock drops 2% and fifty percent of the time drops 4%.
In the history of this stock, it always drops a minimum of 4.52% when the positive VI is at or above its current level at the same time the RSI is at or above its current level. This additional study requires the stochastic to be overbought as it is today too. Since this current bull began in 2008-2009, the RSI has never reached it current level. I do not like only having one data point to base projections from, however, multiple signals are at play and support a drop from the stock's current level.
The stock is also at its long-term (since 2009) resistance line. The stock has broken above this line twice before. Both times the high of the day broke above this line, while the stock always closed below it. The exact same thing has occurred today. The median drop on those occasions was 9.83% and it occurs over an average of the following 17 trading days.
The SAG, record-high RSI reading, and flirtation with the long-term resistance line all point to downward movement for JNJ. Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the SAG gauge, the stock could drop at least 5% over the next 31 trading days if not sooner.
Marsh & McLennan (MMC) To Drop On Next Two Day PullbackMarsh & McLennan Companies has been in a bullish trend since 2009. It has been on a quicker and narrower bull trend since the beginning of 2016. On multiple occasions through this trend, three of the technical indicators discussed below are at similar or higher levels, than they are now. These instances have resulted in short-term losses for the stock. I have laid out the reasons and levels to which the stock may drop while it most likely continues its long-term trend.
When we look at technical indicators, the relative strength index (RSI) is at 81.3492. 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 well overbought.
The positive vortex indicator (VI) is at 1.4006 and the negative is at 0.6499. 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 positive value is at one of its highest levels ever. This always results in a pullback for the stock which should begin within days.
The stochastic oscillator K value is 92.5655 and D value is 89.1630. 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 very overbought. It cannot sit at this level much longer. Once the K value crosses below the D, the stock should begin to drop.
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 which culminates in an oversold or overbought alert. That signal will occur within the next few days once the stock sees two days of consecutive drops. Because this signal will go off after continued drops, now is the best time to enter a position and take greater advantage of the pending downward movement.
Upon back-testing this indicator, it has signaled overbought status 82 times dating back to 1987. Eighty percent of the time the stock drops at least 0.75% over the following 30 trading days after the indicator date. Seventy percent of the time, the stock drops 2% and fifty percent of the time drops 4%.
In the history of this stock, it always drops a minimum of 2.55% when the positive VI is at or above its current level at the same time the RSI is at or above its current level. This additional study requires the stochastic to be overbought as it is today too. Eleven occurrences met this criteria and were studied. The median loss for the stock is 5.13% and the loss takes a median of 21 trading days to occur. The standard deviation for this first study is 2.42%. Five of these instances occurred at the same time the SAG gauge determined the stock to be overbought. The minimum loss for these instances is 3.12% and the median drop is 3.80%. The standard deviation for this second study is 1.48% The maximum movement for this stock could occur within the next 17-30 days.
Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the SAG gauge, the stock could drop at least 3% over the next 37 trading days if not sooner.
Foot Locker Incorporated (FL) Always Rises When This HappensFoot Locker Incorporated has been in a bullishtrend since 2008. It has however, been moving downward since its most recent earnings call. On multiple occasions through this trend, three of the technical indicators discussed below are at similar or lower levels, than they are now. These instances have resulted in nice short-term gains for the stock. I have laid out the reasons and levels to which the stock may gain while it most likely continues its long-term trend.
When we look at technical indicators, the relative strength index (RSI) is at 19.7756. RSI tends to determine trends, 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 oversold.
The positive vortex indicator (VI) is at 0.7989 and the negative is at 1.2480. 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 negative value is high, meaning the stock has been moving down, and is continuing to do so. The momentum has begun to slow and the positive value is beginning to move upward. The stock should begin rising soon.
The stochastic oscillator K value is 6.2597 and D value is 5.3371. 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 very oversold. I cannot sit at this level much longer. Once the D value crosses above the K, the stock should begin to rise.
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 which culminates in an oversold or overbought alert. That signal will occur within the next few days. The one more day of gains should create the signal. Because this signal will go off after continued gains, now is the best time to enter a position and take greater advantage of the pending upward movement.
Upon back-testing this indicator, it has signaled oversold status 72 times in the history of the stock. Eighty percent of the time the stock gains at least 2.50% over the following 30 trading days after the indicator date. Seventy percent of the time, the stock gains 5% and fifty percent of the time gains 11%.
In the history of this stock, it always gains a minimum of 3.64% when the negative VI is at or above its current level at the same time the RSI is oversold at or below its current level. This additional study requires the stochastic to be oversold as it is today too. Thirteen similar occurrences were studied. The median gain for the stock is 10.57% and the gain takes a median of eight trading days to occur. Seven of these instances occurred at the same time the SAG gauge determined the stock to be oversold. The minimum gain for these instances is 9.38% and the median gain is 19.70%. All of these statistical gains happen fast so anticipating the stock to go up and up is not recommended. The maximum movement for this stock could occur within the next 15-25 days.
Considering the RSI, VI and stochastic levels, the overall direction favors a move to the upside. Based on historical movement compared to current levels and the SAG gauge, the stock could gain at least 5% over the next 35 trading days if not sooner.
Overbought Tesoro Corp (TSO) Heading Down Soon Tesoro Corporation has been in a relatively bullish trend since 2016. On multiple occasions through this trend, three of the technical indicators discussed below are at similar or higher levels, than they are now. These instances have resulted in short-term losses for the stock. I have laid out the reasons and levels to which the stock may drop while it most likely continues its long-term trend.
When we look at technical indicators, the relative strength index (RSI) is at 79.4823. RSI tends to determine trends, 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 extremely overbought. The RSI has not been at or above its current level since 2013, which resulted in a 8.96% loss over 7 trading days.
The positive vortex indicator (VI) is at 1.2246 and the negative is at 0.7445. 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 positive value is nearing very high levels. Typically this high results in a downtrend for the stock.
The stochastic oscillator K value is 82.2446 and D value is 72.1417. 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 almost fully overbought and it has been flirting with this level for a few weeks. An official downtrend should begin once the D crosses above the K value.
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 which culminates in an oversold or overbought alert. That signal will likely occur over the next few days. The only thing holding this signal from going off now is continued gains in the stock. If the stock moves up for 1-2 more days and then reverses down, the signal should occur. With the stock being extremely overbought and the chance of this indicator going off, now is the best time to enter a position and take greater advantage of the pending movement.
Upon back-testing this indicator, it has signaled overbought status 89 times in the history of the stock. The stock drops at least 0.50% over the following 30 trading days after the indicator date. Eighty percent of the time, the stock drops 3.25% and seventy percent of the time drops 4.75%.
Since the last time the RSI was overbought at its current level, there have been four instances the RSI was overbought, and the positive VI was above its current level at the same time. The additional study requires the stochastic to be overbought as it is today. These instances have resulted in a minimum loss of 3.90% and median loss of 8.10%. All of these statistical losses happened over very short timeframes. Anticipating the stock to continue downward movement for more than 2-3 weeks is not recommended. The maximum movement for this stock could occur within the next 10-15 days.
Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the SAG gauge, the stock could drop at least 3.25% over the next 33 trading days if not sooner.
