My Recent Discovery: RSI Divergence

The market still isn't on a growth trajectory, at least based on volume. It crossed the 130-day moving average (blue line), but look at the volume, it's not as convincing. See below (this is as of yesterday).



September 21

Our market closed down -18.65 points to close at 3,423.73, (-0.54%) . The Dow was also down last night by -48.86 (-0.35%). Colonial mentality has invaded the stock market! Maybe what's adding to the bear tone is that ZTE controversy. Now they're going to try to unseat JDV. Tsk Tsk, anyway enough of that politics.

The good thing about the market is that we still managed to close above 3,400. And even better, we recovered from an earlier point loss of -35 or so points.

I recently discovered this tactic called RSI Divergence. It worked for me on two stocks - BPC and APX, so far. I tested it out on APX today, without considering the high gold price nor looking at their fundamentals (or lack thereof). I got out of BPC last week and I just focused on other stocks (for BPC I also used the same tactic), and I can't remember the cost and selling price of that. So I'll discuss APX instead.

APX was a day trade (today). I got in at 5.50, then sold at 5.90. Since this was hypothesis testing, I only bought a minimal amount of shares. Please look at chart below. Notice, the stock is minimally traded in terms of volume, but the divergence still worked in my favor. So maybe it's luck today, or good entry point? In any case, please look at RSI divergence vs. price chart.




I'll still keep on trying this if it works on other stocks. For today, I'm quite happy with the hypothesis testing :-)

Hindsight 20/20, Technical Analysis 1/1

Well on hindsight, my timing today was right, given the very high gold prices. The RSI Divergence then served as a good justification to go in. Take note, I'm talking now in
hindsight. So in future RSI Divergences, you have to make sure you time your entries well. I'm glad I have this program I use, called Technistock. When you see a lot of buying intraday, that's probably a good day for you to enter the market.

Have a great weekend guys!