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Rsi_oversold

Overbought to Oversold: The Crucial Addition!Here's why most algorithms fail. They don't take into account the context you needed it to. Here's why it's hard to correct that: you need something OUTSIDE of the raw number-crunching that you're doing in order to understand what's happening. If you're very good at that, you're already a profitable trader to begin with! In that case, it can be discouraging to move to a different platform where, at least to begin with, you don't see yourself making any move into profitable territory any time soon. In this example, I used a raw "overbought to oversold" strategy that looks at RSI crossing from overbought/oversold to fair value to time exits and entries. The problem is, results vary widely. Sometimes, it is right 95% of the time for hundreds and hundreds of bars. Other times, it stops you out thirty times in a row. Whenever you see this type of erratic behavior, you know something outside of the stochastic nature of asset prices is playing its part. This is why you need to understand what you're doing; what you're coding, and why the results are what they are. What kind of indicator is RSI? When does it work, and when does it fail? When you realize RSI is an oscillating momentum indicator, it's not hard to figure out it does well when a stock is ranging, and does poorly if it's strongly trending. RSI can be seen hitting overbought a dozen times during a strong bull run without the price action showing more than a few small pull-backs along the way. Makes sense: it is essentially built to analyze what it thinks of price action if you'd assume that the price will stay within the same range, or is given time to consolidate after having broken out of a previous range. When you understand this, the answer to our erratic algorithm becomes clear. We need a trend indicator that stays flat enough when a stock is showing certain types of ranging behavior, but steep enough when it rallies for long enough or ranges so wildly during an erratic time that RSI won't measure it correctly. If we try to do this with a simple moving average, the problem you'll encounter is that it's either too reactive or too sluggish. You want to have some indication on the slope of the moving average, which indicates trend rather than momentum. The difference in slopes in the near term could be read as a form of "MACD", which is obviously momentum, but if you take it day-over-day, it more or less indicates the general trend direction. Now, we can see on the chart below how we're not trading when RSI is misrepresenting the "overbought" and "oversold" states because it failed to take into account price action and trend, while trading very accurately when the stock is ranging. That's a home run algorithm waiting to enter the next stages: adding optional functionalities, optimization, and a battery of backtests. Whether you want to build an algo, or trade manually, simply understanding how indicators can complement one another and how you can quantify your pre-existing intuition for "ranging" and "trending" without using complex variables and indicators beyond simple differences of moving averages can be hugely beneficial to your development as a trader. Hope you learned something and happy trading!
MIL:1ALVEducation
by ralphschraven
1
RSI and breakoutsIve noticed that when : 1The RSI hits below 30 on the 30min sometimes 1hr time frame 2Then goes up to just before 70 ...say 67 on the RSI 3Then drops again to 25-29 THAT'S A BUY I think that would indicate a breakout to the upside. The RSI will go up and down in wave patterns. This doesn't mean the price will follow. BE CAREFUL. So, if it has to hit 70 on the RSI but doesn't. Then drops ,all those people who FOMOed in are FOMOing out at a lower price bringing it up but with more volume. THIS IS JUST ME TALKING AND NOT ADVICE.
KEducation
by UnknownUnicorn5174798
The USDOLLAR Heads for its Worst Week of the YearThe USDOLLAR is having a brutal week after Tuesday’s emergency rate cut by the Federal Reserve – with markets expecting another 50 basis points cut on the bank's March 18th meeting. Carry trades unwind and the index breaks below 12.250, which exposes last month lows (12.200), closely followed by December’s low (12.181). Technically speaking these levels appear distant as it trades to extremely oversold territory. As such it could react back towards 12.271, but a massive catalyst would be required in order to challenge today’s high (12.300).
FX:USDOLLAR
by FXCM
Sell Opportunity for GOLDDaily time frame analysis shows Gold making correction as we can see the price near 0.618 Fibo level. I expect the price will make correction/retracement for these few days before it continues for bullish momentum. On top of that, the RSI already oversold at 88% which means it will act as our confirmation for short entry. Last but not least, we need to wait for price action 25th Feb 2020 as last confirmation before we go short just to ensure the price not break the resistance line. This is because the major trend still uptrend so why not we wait and be patient in order to have a consistency profit. So, that's all for my analysis and trade at your own risk. Ciao!
OANDA:XAUUSDShort
by traderfiz
ETH/BTC (Prj.Y19.P2.E8).Macro.Bullish signsHi All, Recently I came to a new understanding on RSI and MA and how one can trade with this indicator. ************************** I have leveraged others scripts and created my own RIS_EMA\MA indicator, soon to be share out, so watch my space for this. I believe others have done this but I feel a cleaner job can be done. ************************* Using Fib Fan and support\resistance lines + trending, I believe there is a clear formation taking place at the macro level. It wouldn't hurt with the Istanbul release as well. As you can see on the 4 Hrly chart, there is a regular bullish divergence in place and soon to break out. This could either mean BTC is about to drop or ETH is about to take off. Also you can also see based on this hypothesis, ETH on the MACRO level (against BTC) is creating a potentially large bullish Pennant. Note on the 1 HRLY chart, this correlates to the 0.618 retracement level. Conditions: If the RSI on the DAILY passes the 200 sma\ema on the RSI\SMA chart, then the signal is there. One also requires at least 1 day candle stick to open and close above the 200 RSI\SMA indicator level. Look at the 4 Hrly and Daily chart, look for a large engulfing candle with a inverted hammer at the key level to get the entry going, ready to buy long (maybe a morning star) It already looks like a reversal pattern with the Candle sticks is taking place. Please give a thumbs up or a like if you agree or just appreciate the effort. Regards, S.Sari /CryptoProspa Daily Chart, note how the RSI also supports the pennant formation. 4 HRLY chart 1 HRLY chart FYI Candlestick detector >
Long
by ssari
Avaya a very attractively valued defensive stock for OctoberOctober is expected to be a bad month for most technology stocks due to the earnings recession, but the bright spots in the sector are software and IT services. Avaya sits in both those categories (primarily software). Down roughly 30% since its IPO this time last year, Avaya is surprisingly inexpensive at close to its all-time low. Its RSI is recovering from oversold. The fundamental analysts at S&P Capital IQ rate Avaya as highly undervalued. In my opinion, Avaya has potential earnings catalysts ahead. The company has operated at a GAAP loss in 2019 (-$480 million at the midpoint of guidance), but this was mostly due to a one-time impairment charge due to stock price weakness. On the whole the company is profitable and has positive cash flow. Avaya expects to report a profit this quarter 4 times higher than the same quarter last year ($44 million at the midpoint of guidance, compared to $11 million last year). The company has consistently beaten the pants off analyst estimates on its earnings reports. Last quarter Avaya signed two big government contracts and also reported that it was working with Intel's AI division to improve the conversational intelligence of its software. On September 20, Avaya got some big bullish call options activity. Perhaps this was in anticipation of its September 24 news release, "New Innovations Unveiled For Avaya IX™ Contact Center Portfolio." I have to admit, investor response to this release has been underwhelming. However, the stock could get a boost when Avaya showcases its new product features at GITEX Technology Week in Dubai on October 6-10. In any case, I expect a technical recovery from oversold levels and a mid-term improvement in the stock price on the strength of strong guidance.
ALong
by ChristopherCarrollSmith
Software stocks a haven from the coming tech earnings recessionSoftware stocks are fairly cheap right now, both when you look at them in isolation and when you chart them relative to the S&P 500. On that chart, they're close to their lowest level since March: This is a nice opportunity to enter, especially since software stocks consistently beat the S&P 500 in the long term: Software stocks are especially attractive right now as a defensive investment amidst what Barron's is calling an "earnings recession." Analysts surveyed by FactSet revealed that this quarter's earnings are expected to be bad, with technology stocks especially hard hit. The two bright spots in the tech sector, however, are software and IT services. That suggests that software stocks could substantially outperform the NASDAQ in October.
PLong
by ChristopherCarrollSmith
UNH insider sales flash a warning sign ahead of earningsUnitedHealth Group has had an incredibly strong showing this year, and right now it's priced pretty attractively at oversold level on the hourly chart. On its daily chart it's at RSI 38, nearing oversold (RSI 30) but not quite there yet. It also hasn't yet tested its August low of 220.78 or its one-year lows of 208.07 and 216.84. I suspect we'll get a bounce tomorrow from the hourly oversold level, then fall some more to the 216-220 range. At that point we should be about oversold on the daily chart and should bounce into earnings on October 15. The average analyst price target on UNH is about 299, implying about 33% upside from the current price. Analyst estimates of UNH earnings have held steady for the past month at 3.77, significantly better than 3.41 the same quarter last year. UNH has an 8.7/10 Equity Starmine Summary Score rating. So most signs are bullish. However, company director Richard Burke sold 10,000 shares last week. Other directors also recently sold thousands of shares. All this insider selling doesn't inspire confidence for good earnings this quarter. On that basis alone, I don't think I'd hold this for anything more than a pre-earnings bounce. On the other hand, insider sellers may be responding to political risk rather than to the company's financials. The healthcare sector is expected to report good earnings this quarter, which could make it attractive as a defensive play in an earnings recession. Healthcare is a defensive sector that usually does well when the rest of the market is down. Right now healthcare stocks are cheap, which makes them even more attractive. However, with Elizabeth Warren leading the Democratic pack, UNH's share price may continue its breakdown. Health insurance and pharmaceutical companies are at particular risk from Warren's "Medicare for All" plan, and you may be able to chart healthcare stocks' performance from now until the election as a function of Warren's popularity in the polls.
NYSE:UNH
by ChristopherCarrollSmith
ZS Support Line? Neg Earnings Brought us Here- Over SoldNot so many days ago, ZS missed earnings by a little bit but still show strong revenue support. You can see the downward gap on earnings day. BUT- Back in February you see the Positive Power Earnings Gap from the $50 support level up to the $57 level. Almost the exact same line as this recent earnings fall. This triggered an OVER SOLD on my watchlist and took a look at RSI well below 30. I love these spots and when looked at trend from beginning of the year through beginning of July, ZS was steadily in growth mode. We are at a greater than 40% price break from the 52 week high of 89.54 Let's see if we can't reach that GAP back up to $59 over the next month or so. Thoughts?
NASDAQ:ZSLong
by jeffyanzo
One for the Watch List - Kura SushiKura Sushi may be setting up for a double bottom bounce from 18.50. The stock is very close to oversold on the hourly chart. A price of 18.50 or an RSI of 25 on the hourly chart would be a great entry signal. A decisive break below 18.50, however, would signal a downward breakout and further downside ahead for the stock. With a P/E around 100, Kura Sushi is probably overvalued (as IPOs often tend to be). However, the company has a sexy business model that combines food and interactive technology, and last quarter its earnings grew 80% year over year. Kura's restaurants are always packed, and with the influx of IPO investment I think the company will quickly scale. The average analyst price target for Kura Sushi jumped from about $20 per share last month to about $30 per share this month, implying about 62% upside from the current price. All analysts who cover the stock have rated it a buy. There are only a few analysts who currently cover Kura Sushi, so the average price target could change radically as more analysts add coverage. New analyst ratings will act as catalysts for the stock. For the long-term buy and hold investor, I'd be patient and look for an entry at a more attractive P/E, perhaps near the all-time low of 15.05. But for near- and medium-term traders, I think there's potential here to swing a bounce.
NASDAQ:KRUSLong
by ChristopherCarrollSmith
DOGEBTC Long - Oversold on the weeklyOne of crypto's oldest coins acting as a flea on the LTC network. Wide circulation and media exposure and support from Ledger and various online services. Demand zone is lower at 15 - 20 sat, but DOGE along with most other alts are already heavily oversold because people are emptying their DOGE wallets to exit to BTC while it's still above 10K. BTC has failed to push ahead to 11K (how many rejections do we need?!) so further selling pressure is unlikely. Last night I was deciding whether to buy MONA or DOGE, went for DOGE and missed out on a sweet 40% overnight increase. Keep an eye on meme coins for explosive movement when historic lows are reached. - Casey
Long
by Milky_Udders
1
This Could Be The Easiest Buy Signal Of 2019Since March of 2017 we have only seen 3 bullish crosses on the MACD for XRP/BTC 1W chart. I have circled those crosses. We are very close to a fourth bullish cross which means it is almost time to buy XRP. As you can see, the distance between the crosses is becoming longer and the returns seen after the crosses are becoming less. BUT, that doesn't mean that we aren't going to see some fireworks. With that said, I feel like the reason we didn't see huge returns last cross was because of the lack of interest in the market at the time. Price is reaching a zone that has strong buy support. People who have discounted XRP in the past are now thinking about whether they should jump in because of a potential pump that is bound to happen. I have outlined my 3 price targets conservative target:5550 sats, moderate target:10040 sats and extreme target: 17031 sats. This price in this support zone is almost too good to pass up and I believe this could be one of the easiest profits of 2019.
Long
by ParCrypto
24