Best indicator for a bounce?

[gulf4]

I'd like to take a poll or hear thoughts on which technical indicator/combination is most useful for trying to capture a bounce in the price of a stock.

I am not necessarily looking for trend reversal or big price swings just when one might expect a bounce of a few days after a period of weakness.

Thanks

 

[crazyAtrader]

Quote from gulf4:

I'd like to take a poll or hear thoughts on which technical indicator/combination is most useful for trying to capture a bounce in the price of a stock.

I am not necessarily looking for trend reversal or big price swings just when one might expect a bounce of a few days after a period of weakness.

Thanks

Pullback on a leading stock when the general market is uptrending tends to be a good signal.

Crazy a

 

[nazzdack]

Quote from gulf4:
----capture a bounce in the price of a stock.
----when one might expect a bounce....

1) If a stock is making multiple consecutive lower daily lows and the next day has a higher daily low, that may portend a bounce/rebound/rally/retracement. The downside momentum may be exhausted.
2) It's chart-dependent, not indicator-dependent. :eek:

 

[Lucrum]

Quote from nazzdack:

...2) It's chart-dependent, not indicator-dependent. :eek:

Sound wisdom.

 

[Handle123]

I believe it can be both. Using trendlines on price, like upsloping trendline and when price comes down to TL, buy it on that TL is the cheapest trade, cause the stop can be tighter than buying above the high of that bar that has bounced off the TL, of course one doesn't know if price will continue through the TL and there by not being a bounce. The higher the timeframe and duration of the trendline offers to me, better likelyhood of a bounce I seek.

But there are indicators that can show bounces such as TSI, True Strength Index, when it goes to zero line and bounces off. Stochastics, when the fast bounces off the slow. Even using Fib levels can be considered as technical bounces. Moving averages offer some of the best bounces around. And my favorite are Bollinger Bands using volume to confirm for counter-trend trades.

Of course I just stayed at a Holiday Inn and my nurse says it is medication time.

 

[nazzdack]

Quote from Handle123:
----I believe....
----Holiday Inn....
----my nurse....

?....??....!.....Are you taking HER "temperature"? :eek:

 

[1a2b3cppp]

Average into it. Price cannot be predicted, but if you are POSITIVE that it will bounce at some point (rather than going to zero), then average into it as price goes down, sell when you're in the profit.

Or try it with options.

 

[crazyAtrader]

Quote from 1a2b3cppp:

Average into it. Price cannot be predicted, but if you are POSITIVE that it will bounce at some point (rather than going to zero), then average into it as price goes down, sell when you're in the profit.

Or try it with options.

The problem with this technique is that ironically you need to be fairly wrong for it to take off on good size, otherwise it's a minuscule gain.

Crazy A

 

[ElecEquity]

Quote from gulf4:

I'd like to take a poll or hear thoughts on which technical indicator/combination is most useful for trying to capture a bounce in the price of a stock.

I am not necessarily looking for trend reversal or big price swings just when one might expect a bounce of a few days after a period of weakness.

Thanks

Usually when I'm selling for a loser.

 

[NoDoji]

Quote from ElecEquity:

Usually when I'm selling for a loser.

EE is giving you the best indicator ever here. When you're thinking of buying a falling knife for a bounce, first decide where you'd place your absolute disaster stop. That is where price will pivot and stage a kickass bounce.

The same strategy works for shorting a high flyer.