Is this Oversold Market Ready to Bounce?

Let’s take a look at a chart of the S&P 500:

What jumped out at me is that the index has, without fail, bounced when reaching oversold conditions in stochastics and RSI. We’ve reached that level again, and as candlestick officionados will point out, the last two days have printed long tails at support. These two factors lead me to believe another bounce is around the corner.

This is part of the reason why I am holding my longs in the face of a minor correction and went long NVDA today. However, I am not going “all in” to the long side. I still am not using my normal position size (500-700 shares) and am vigilantly noting where my stops are. We cannot ignore last Thursday’s distribution day.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Blog at WordPress.com.

Up ↑

%d bloggers like this: