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- SignalWatch – 5.23.17
SignalWatch – 5.23.17
May 23rd
Good afternoon folks. I hope you have all had great Tuesday’s so far and that your evenings just get better. Aside from some interesting intraday moves in the Nasdaq, the indexes were quite, all closing with small gains. The Dow finished +.21%, the S&P +.18% and the Nasdaq clung to a .08% gain. Crude oil lost ground at the open but clawed its way back into positive territory by the close to finish +.70% on the day.
I want to thank all of you once again for your patience concerning last night’s post. As promised, today’s post will feature an extra signal to make up for the lack of signals yesterday. Thank you kindly for your understanding, I greatly appreciate it.
On to the signals!
The Darvas Box is looking for a move on BK back into the $48-$49 zone.
We start tonight’s post with a new signal on BNY Mellon courtesy of the Darvas Box Module. As we can see, BK has been trading along a trend that dates back to January. You’ll notice that the two previous times BK tested the trend, it used the trend as bullish fulcrums, pivoting off of the trend and running for decent gains. This is what we are essentially looking for BK to do now. It is also testing the 50 SMA. The 50 period simple moving average is an important psychological indicator to many traders (including me) and it often symbolizes a big bullish move when a stock’s price can move through it to the upside (the reverse is true as well). If it can push through the 50, we could see BK back in $48-$49 in the near future.
The strategy that fired this signal is no stranger to SW. It is our old friend, the Darvas Classic strategy, which is a part of our Darvas Box trading module. The method behind the strategy’s brilliance is credited to Mr. Nicolas Darvas. His theory has been used successfully for decades by traders around the world over. What Darvas is searching for are decreases and increases in momentum. Darvas used market momentum to decide when to enter a trade as well as when to get out. If any stock’s current price breaks free from a Darvas Box, it is a contender for a breakout move. Darvas Box is one of our most beloved strategies and it looks like it just may have found another winner.
Next up. Celgene.
One of our newest strategies has brought us a nice reversion setup with CELG.
CELG has a few things going for it at the moment. First off, it is sporting a 62% Fibonacci Retracement. Fibonacci Retracements come from the Fibonacci number sequence, including the values 3/8, 4/8, and 5/8. Each of these retracement amounts (38%, 50%, and 62%) is considered a Fibonacci Retracement.
It is used as a trading assistant to indicate reversal points on a price chart using the Fib. ratios. The 62% retracement is obviously the largest and also usually sees the largest reversion moves. This particular pattern is calling for CELG to return to its highs back in the $127 zone. Not bad. CELG is also testing the 200 SMA, which acts very similar to the 50 SMA which we just spoke about. So we have the Fib. Ret. forming a confluence level with the 200 SMA. “Excellent” as Mr. Burns would say. Oh, and its also oversold on both the RSI and Bollinger Band indicators…
This signal was fired by one of our advanced strategies, the MS-16. MS-16 gives you excellent performance along with an abundance of safety. By using two different momentum based systems and filtering based on trend direction, we were able to get consistently profitable results. The MS-16 Strategy also uses an indicator in OmniTrader called Days to Earnings. This indicator helps you avoid trading into a potentially hazardous earnings reports. The MS-16 Strategy combines with the MS-16 Dynamic Scan to obtain maximum performance. The scan targets stocks that are outperforming the market but have made a significant pullback against the trend, setting up gorgeous reversion moves. Like the one we see here on CELG. Keep an eye on this one, it could be a rocket.
Next on the list, CVS.
We are looking to play the trading range on CVS.
CVS has established quite a nice trading range over the past few months and it is currently testing the lower boundary of that range, putting into a nice reversal setup. The lower range boundary is acting as support and we can see that CVS is oversold on both the RSI and B.B. indicators, which is the ideal reading for bullish entries. Volume is also starting to tick up ever so slightly, so we may see the next push in volume before you can say Tylenol. OK, bad joke. But seriously, this guy could pop. It will run into the 50 SMA before it reaches the upper boundary but if it manages to push through, there is no stopping it until it gets back into the $83-$84 zone.
Like so many other signals as of late, this one was fired by our good friend, GroupTrader 3.0. So here is the quick skinny on GT3. Industry group rotation is the name of its game. Meaning, it seeks out industry groups that have highly correlated stocks within them and then finds the moves that are the most confirmed by the group. Once a stock is singled out (or ETF) a signal is fired. In this case, GT3 is looking for a short-term reversal move. If CVS gets back in line and continues its range, one could milk this for quite awhile. Not too shabby.
Last but certainly not least, Gilead.
Advanced Cycle Trader is looking for a renewed bullish cycle on GILD.
So GILD has seen better days. It has been trending lower for quite awhile but, what do corrections ultimately produce? New buying opportunities my friends. And a new buying cycle (even a short-lived one) may be upon us. It is oversold on both the RSI and the Bollinger Bands as well as its very own indicator, the Adaptive RSI. This RSI is more advanced than your everyday RSI and it confirms the changes in relative strength before it becomes apparent in the other indicators.
Advanced CycleTrader 2.0 (ACT2) is based on technology called Digital Signal Processing, or DSP. ACT2 uses DSP to process market data and find new trading opportunities. ACT2 uses DSP powered indicators to analyze and trade the markets. The Market Mode Indicator (MMI) identifies the personality, or mode, of the market. This indicator determines when the market is in a cyclical or trending mode, so we can make the most of our cycle analysis. Once we understand the mode of the market, we can find good cycle trades. The Spectrum Indicator shows you the strength and stability of the strongest market cycle, and ACT’s Heatmaps show a comprehensive view of the market cycles that are currently in play. This tech also has adaptive indicators and systems that adjust to market conditions in order to sync up with the strongest market cycles.
If you’d like to find these great strategies and learn more about them, check them out in our store here and here. You have to have OmniTrader to run these strategies but if you don’t have OT yet, don’t sweat it. You can score a free 30 day trial right here just for being a SW member!
That’s it for tonight. Have a good one and catch you guys tomorrow.
The products and demonstrations listed on this website are not recommendations to buy or sell, but rather guidelines to interpreting their respective analysis methods. This information should only be used by investors who are aware of the risks inherent in trading. Nirvana Systems shall have no liability for any investment decisions based on the use of their software, any trading strategies or any information provided through other services such as seminars, webinars, or content included in the SignalWatch website.
About the Author Ryan Belknap
Ryan has been with Nirvana since 2012 and has been manning the trading desk since Day 1. He was one of the founding members of Nirvana's Trading Lab and also TraderSource.com along with Ryan Olson and Russell Casperson. Ryan logged more than 3,500 hours trading and educating live in the Lab. He is also the lead author of SignalWatch.com. Ryan is a seasoned educator and has conducted numerous educational webinars and is an OmniTrader University instructor. Ryan prefers swing trading and position trading. Outside of the market, Ryan has passions for the outdoors, baseball, exercise, coffee, pop-culture and spending time with his family.