Please familiarize yourself with some of the techniques that we employ:
SMH Commodity Channel Index
The Commodity Channel Index ("CCI") measures the variation of
a security's price from its statistical mean. High values show that prices
are unusually high compared to average prices whereas low values indicate
that prices are unusually low.
When CCI levels are below 100, the stocks are oversold, and when CCI
levels are above 100, the stocks are overbought. At TechnicalSignals.com
we are using 150 and -150 as overbought and oversold levels in order to
filter some of the less reliable stock moves.
CCI works best in a trading markets or stocks (sideways movements). In
such a case, CCI gives both BUY and SELL signals.
CCI can also be used in a trending market (up or down). For up trending
stocks, it is wise to use CCI' s oversold level as a BUY signal. For down
trending stocks, it is better to use CCI' s overbought level as a SELL
signal.
As you can see from the picture above, combining support and resistance
lines with overbought and oversold conditions of CCI, we can obtain highly
reliable Buy/Sell signals!
Broadening Tops
The formation has a megaphone appearance with higher highs and lower lows
that widen over time. The Breakout can be upward or downward as well.
The failure rate of such a pattern is 4%, which gives it an accuracy rate
of 96%. Incredible!
The Broadening Top formation can be used in combination with horizontal
support lines, as seen in the chart above!
Dead-Cat Bounce
On a negative announcement, prices gapped down and plunge usually between
20% and 30% or more. After this massive decline covering 2 or 3 days the
stock will bounce to a "Recovery High". However, the decline
is not over!
After the bounce finishes, another decline begins, less strong but typically
prices decline another 5% to 20%.
Ultimate Oscillator
In simple words, the Ultimate Oscillator uses the weighted sums of three
oscillators, each of which uses a different time period. It is a very
reliable indicator especially in trading (sideways movements) markets
or stocks. As any oscillator, we should use its oversold condition as
an entry point to a stock that is in an up trend. We shall use the overbought
condition for a short sell signal for stocks that are in a downtrend.