With the market pulling back to the lower volatility band near the long term Chaikin trend line while money flow remains positive and persistent, i'm looking at very bullish optionable stocks flashing oversold buy signals.
We recently back tested the oversold buy strategy and experienced a 70% win rate when holding stocks for about a month after the signal. Uptrending equities from strong industry groups need to demonstrate both positive relative strength and solid money flow.
I prefer to wait until price bounces up above the short-term Chaikin line and both moving averages must be trending up. For me the signal remains valid as long as the stock is oversold and the power gauge hasn't turned neutral from bullish
With a 70% win rate in our recent backtest of liquid optionable stocks and the Oversold Buy Signal, we are looking for trade candidates. XOM seems to meet our rules.
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