If you’re one of my long-haulers, then you already know that I rely heavily on my Cumulative Strength Index scan…
I use it as a barometer for the broader stock market, which helps me gauge things like the S&P 500 to find the hottest sectors and stocks to trade… Because once a company gets to the upper edge of it, it tends to stay there for some time.
You’ve probably also picked up on the fact that Energy has been leading all sectors, followed by Basic Materials…
These have been the hottest sectors lately. But because things have been so volatile, I thought I’d go into even more detail to show you how my CSI scan works in both bullish and bearish markets.
How My CSI Scan Works in Both Bullish and Bearish Markets
In the video above, you’ll notice that Dollar Tree Inc. (Nasdaq: DLTR) has been one of top stocks on my CSI scan for about two months now.
But what we can also do is add a study to its stock chart…
I added a simple five-day Relative Strength Index indicator (the green line across the bottom), which can tell us if markets are overbought or oversold. I used five days as opposed to something larger, like 10 or 14 days, because I want to give it extra sensitivity.
Now, we just closed one of my Alpha Rotation Top Stock trades in the Aug. 19 expiration, $165 strike calls for a 20.35% gain in DLTR* in just three days by using the same exact method I just described above… So I’m confident it works.
In fact, Alpha Rotation Top Stock also closed out its Aug. 19 expiration, $100 calls this past Thursday for a nice 22.10%* gain in just 25 trading days.
Since we’re all about meat-and-potatoes honesty — no fluff! — here at WealthPress, and for the sake of full disclosure, from May 11, 2021, to May 6, 2022, the average return for an Alpha Rotation Top Stock options play is 4.1%, with an average holding period of 12 days and a win rate of 63%.
And I shouldn’t have to tell you that a 4.1% return every 12 days on average is great, especially in this market!
I mean, DLTR has been trending strong for several months…
But the point I want to make is that if someone had bought the stock when the RSI turned red back in January and let the trade ride, they’d be in a good position because DLTR hasn’t broken down further than that level since.
And before you ask, yes…
The slight addition I just made to this chart also works to the downside!
So check out my short video to learn more about how my CSI scan works in both bullish and bearish markets.
Don’t forget to like and subscribe to our YouTube channel if you haven’t already so you can be notified as soon as we post our next video, and see what other trade opportunities we’re paying close attention to!
P.S. The stock market is an absolute bloodbath right now…
With many traders’ accounts in the red, day after day…
No one knows what to do…
But one former $700 million hedge fund manager is warning that it’s only going to get worse!
Click here to learn how you can brace yourself for what could be the biggest market move of 2022.
*Disclaimer: Stated results are atypical for given period. Past performance is not indicative of any future results. Trade at your own risk.
