The Stochastic Sell signal

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:

Will history rhyme or is the perspective for “things in the ground” going to change for the foreseeable future?

Possible scenarios:

  • 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

 

5 thoughts on “The Stochastic Sell signal

  1. Pingback: Best Of The StockTwits Blog Network 9-22-12 - bclundbclund

  2. Combine your indicator with the moving averages being “upside down”. That kinda does it for me. Granted the 20 just crossed above the 50 but they are all below the 100 so sell away!

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