Thursday, April 5, 2018

Reversal Signal that Predicted Fall of FANG Stocks


From the desk of Sagar Nandi and Superior Profit

Reversal Signal that Predicted Fall of FANG Stocks at the Top


When the USA Market was roaring upward in the recent past, people were always talking about the FANG Stocks. FANG Stocks constituted of Facebook, Amazon, Netflix and Google. The four heavyweights that pulled the Market higher and higher. Then, from around 13th March 2018, these powerful Stocks started a pullback.

You Could Easily Profit from Amazon’s Pullback.

Not so long ago, on 22nd March 2018, one young trader friend wrote to me that Amazon (AMZN.O) was leaping forward. I commented that it was time to be cautious.
Since my conversation with the trader, AMZN dropped until 4th April 2018 when it recovered somewhat. That drop was enough for a very profitable Bearish Swing Trade; using Stocks or simple Put Options or Short Call Verticals; for example.

The news media had a ready explanation for the drop; they always have such reports prepared after the fact. Have you noticed that? Hearing rational-sounding reasons for a move after the move has happened does not help a trader. Instead, what a trader needs is a clear signal when to exit a Long position and when to take a Short; profiting from both the directions. Could you do that on Amazon? Yes. You could do it; efficiently; using CUE Systems and Techniques. No less than two CUE Signals showed Amazon’s weakness. These are explained in the following chart and accompanying descriptions.

AMZN Headwind Reversal Signal had triggered on 13th Mar.

It is not usually easy to predict the top of a Stock’s up move in general. And probably even harder for a Fundamentally Robust Stock like Amazon. However, CUE Technical Trading System include a unique and powerful Headwind Reversal Signal that often flashes before an actual Stock price reversal.  That happened again in AMZN on 13th March. The Headwind Signal appeared at the Very Top of Amazon’s price move. Amazing, isn’t it?

AMZN had Trend Following Short Setup on 22nd Mar 2018

One was that on 22nd March AMZN, in fact, gave a CUE Trend Following Swing Short Trade Setup that we call Go With Flow Short Setup. In the Daily chart (shown below), on that day, AMZN met all the Unambiguous Checklist conditions for the Go With Flow Short Trade Setup. If a valid Short Setup was displayed, Long positions should be cautious and, in fact, could have protected the position using Trailing Stop or exited it all together.

CUE Bearish Headwind Signal in other FANG Stocks


Amazon was not the only one of the FANG Stocks that displayed Bearish Headwind Signal at the Very Top.
Bearish Headwind Signal caught the Very Top of Netflix (NFLX.O) on 12th March 2018.
Headwind Signal was followed by Short Swing Trade Setup that resulted in a high profit.


Google (GOOG.O) displayed the Bearish Headwind Reversal Signal on 13th March 2018, near its All-Time High.
You could use the signal to protect profit in existing Long Position using Trailing Stop. Doing that would protect your capital. At the right edge, Google is at Memory Trend Line Support.

Headwind Reversal Signal in ETFs and Global Stocks

By no means, the FANG Stocks were the only ones where CUE Headwind Signals indicated possible reversals. It signaled a potential reversal in many other Stocks at their Very Top of a swing.
Headwind signal works well with ETFs or Futures as well. In fact, it could catch the Very Top of several swings in SPY, QQQ, and DIA. It works on Global Stocks as well.
Recently there was a Bullish Headwind Reversal Long Trade Setup in the Indian Motor Company, Tata Motors (TAMO.NS). You could find the setup using Headwind Trade Unambiguous Checklist and Sonar Program in CUE Global Technical Trading System. I shared the possible Long trade in our Traders Community on 26th March 2018. That trade has already hit its profit target as shown below.
Every day, you can use the Headwind Sonar Program to look for possible reversal trade setups. Some may be available right now. Learn more about the CUE Systems and Trade Signals and Setups from the Education Center that is open to the public.
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