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SignalWatch – 5.4.17
May 4th
Happy Star Wars Day! If you didn’t know it’s Staw Wars Day, we forgive you but, may the fourth be with you. Another happy coincidence is that if you abbreviate it, it’s happy SW day. I like it. Thank you for indulging my non-sequitur thought there. As for the market, the indexes closed mix after some wonky intraday movement. The S&P finished +.06%, the Nasdaq +.05% and the Dow -.03%.
Let’s go ahead and jump right into the signals!
OT is looking for a reversal move on PEP after it responded bullishly to support.
Pepsico had one heck of a day today, scoring a 1.05% gain after forming a higher low and pivoting off of support at $112. PEP has been trending higher since January and appears as if the next round of buying is upon us. It is oversold on both the RSI and Bollinger Band indicators and volume is rising. All of those factors tied together gives us a compelling argument for a bullish move heading into the $114-$115 zone.
As far as the strategy is concerned, this is one of our base strategies, the OT Reversal strategy. It’s easy to forget just how good out base strategies are, but they are tried and true and find great setups. The reversal strategy runs over 200 systems and filters finding stocks that are oversold and primed for reversion move. PEP fits the bill. I’ve mentioned it before, but if you’re a new addition to the Nirvana family, you owe it to yourself to try OT on the house. It’s legit and changes how you engage the market.
It’s easier to use than hitting the broad side of a barn.
Next up, a Guppy Classic signal on FISV.
FISV beat earnings estimates late last month which gave it a decent boost before starting the pullback we see now. What is nice about this particular pullback is that FISV has formed a perfect higher low right on support at $118.25. It has been trending higher since November and it this higher low looks like the right place to see the next wave of buying commenc
e. If we see the move continue, we could see it make a run at the $122 zone, which is the next level of resistance.
One of our perennial strategies, the GMMA 2.0 triggered this signal. The GMMA 2.0 is based on the work as Daryl Guppy as many of you know. In a nutshell, it compares multiple moving averages and finds stocks that are poised to move above said averages. Guppy uses what we call Count Back Lines (CBL), which is designed to adapt to changing volatility of a market. The strategy also looks for the Guppy Trend Volatility Line. By generating lines based on slower groups of moving averages, and adjusting these lines when the higher average crosses the prior line, a trailing stop is placed that does a superior job than a traditional trailing stop. If you’d like more info, check out its literature on the right.
The last signal of the night is a Darvas Classic signal on FL.
Darvas is looking for this rounded top to roll over on FL.
FL slipped almost 1% today and tripped off a sell signal on the Darvas Classic strategy in the process. FL has been trading along resistance for the past several days close to $78.30 but is now starting to sport a rounded top or bearish saucer pattern. Bearish saucers act just like their counterparts except for the obviously show you when the uptrend has ended and where people are now getting out, cause the price to go lower. Then the bears jump in and go to down driving the price down even more before the bulls sweep in and swipe shares up at a steep discount. In this case, we are looking for a move down into the $76-$75.50 zone before seeing another bullish bump. If support is broken just above $75, we may see it slip even further into the $74-$73 zone.
This signal was fired by another Nirvana hit, the Darvas Box plug-in. We have had tons of Darvas signals featured here in SW so I will spare you the details on how the strategy works. If you’re interested in how it works, check out the JPM signal on this post from last month.
That’s a wrap for tonight. Have a wonderful night!
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.