RSI as a trigger

part of the Simple Approach series

I reviewed numerous charts this weekend that have a similar characteristic with $PCLN: intensified buying or selling when RSI hits 30 or 70 respectively. Here is a daily chart on priceline.com to illustrate:

PCLN_RSI

If you are of the camp that history will rhyme for price then $PCLN is at a Buy signal today. If you are not of that camp, what keeps you from believing that this is a high probability trade?

– DM 9:55 AM CST

The Down Channel

During stock research this morning I noticed this well-defined Down Channel that has formed in $ITW:

ITW_D

Now that price has begun to arm wrestle the 200 SMA I will be watching for a move down to the $90.50 level. An ideal trade here would be a Put Ratio in my opinion.

– DM 10:05 AM CST

 

Earnings preview for Adobe and FedEx

Weekly charts

ADBE_B

I like the June 80/82.5/85/75 Risk Reversal Call Fly for an ADBE earnings trade (long the 80/82.5/85 Call Fly and short the $75 puts).

FDX_weekly

I have an existing position in FDX but for an earnings trade consider this:

Long the June 182.5/185 Call Spread
Short the June 177.5 Puts
Cost: $.20 credit
Takes margin

– DM 10:40 AM CST

 

Baxter International

I trade several baskets of stocks that have a specific trade setup that I look for. One such basket is the Submarine Basket. The goal for this basket is to find quality stocks that have pulled back to a notable Support area and then assess the behavior of price. I typically set Price Alerts as a first step.

One thing I have noticed over the past few months is this: the watch-list I keep for this basket continues to expand.

I have had $BAX on the list for a few days now and have been studying the Daily & Weekly charts quite a bit. Here is the Daily chart with a 150-day and then a 200-day candle view:

BAX_B BAX_B_2

Could this be a false breakdown? Is the Red Volume cluster a capitulation?

 

– DM 8:30 AM CST