The Trick to Spotting Pivot Points up to 80% of the Time
It doesn’t matter how fearful investors get.
Once these four technical pivot points align, eight times out of 10, it’s time to start accumulating. Those indicators include our favorites:
- Bollinger Bands (2,20)
- Moving average convergence divergence (MACD)
- Relative Strength (RSI)
- Williams’ %R (W%R)
Look at Apple (AAPL) for example.
The stock was severely beaten down on trade war fears. Better yet, major analysts were saying, “The bad news is over” for the stock. And technically, the stock was aggressively oversold at bottom of trend. For example, in late May 2019, the stock plunged to its lower Bollinger Band (2,20), where it typically bounces up to 80% of the time.
In addition, RSI was below its 30-line, oversold. MACD pulled back to an extreme low. Plus, Williams’ %R was below its 80-line. When these indicators agree with one another in oversold or overbought territory, we see a pivot up to 80% of the time in the other direction.
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In early June 2019, took a hit on a Wall Street Journal report that the U.S. FTC will be able to examine the effect of FB company practices on digital competition.
“The FTC secured the rights to begin a potential investigation of Facebook and whether it has engaged in unlawful monopolistic practices as part of an agreement that allowed the Justice Department to take the reins in a Google probe, according to people familiar with the matter. The FTC and Justice Department share authority to enforce U.S. antitrust law and at times must work out turf arrangements regarding which agency will handle what issues,” they noted.
However, once the stock fell to its lower Bollinger Band (2,20) with oversold extensions on RSI, MACD, and Williams' %R, it began to break higher.
Amazon.com Inc. (AMZN)
The same thing happened to Amazon.com.
Shares of Amazon fell after a Washington Pot report noted that U.S. antitrust enforcement agencies may have a new agreement on tech oversight. According to The Washington Post, “The move is the result of the FTC and the Department of Justice, the U.S. government’s leading antitrust enforcement agencies, quietly divvying up competition oversight of two of the country’s top tech companies, according to those people, who spoke on the condition of anonymity because the government’s work is confidential. The Justice Department is set to have more jurisdiction over Google, The Washington Post reported on Friday, paving the way for a potential investigation of the search-and-advertising giant.”
Again, after falling to its lower Bollinger Band (2,20) with oversold extensions on RSI, MACD, and Williams' %R, it began to break higher.
Whether you think technical analysis works or not, it’s well worth following.
Each of the above opportunities became explosive for technical traders in a matter of days just using the above four indicators.
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