Sometimes I like simple, clean, cut & dry approaches for buy or sell signals. I often do this using RSI (Relative Strength Index) but today I thought I would illustrate how you can use the Stochastics indicator to look for a Sell signal.
For this post I chose $BTU (Peabody Energy) as an example. Here is a Daily chart showing four (4) Sell signal areas (including now) using boxes:
- Double Top, Resistance test, brings in new sellers
- Drifts/consolidates as price works its way back in side the upper Bollinger Band
- Buyers continue to come in, breaks Resistance line and goes to test 200 SMA above