05/16/2022
The deluge of earnings misses continues… and because of this, you can expect even more downside in stocks.
That should invite more panic selling as well…
(Source: tenor.com)
But if you keep your eyes peeled, quite a few charts have been shorted into oblivion, making the subsequent short covering extremely profitable when a company surprises the analysts…
My screeners have been pinging lately with one ticker and just this morning, I received an alert that they beat on earnings.
Let’s check out Reliance Global Group, Inc. (RELI):
I’m eyeing both the daily and hourly, respectively… The daily gives me a window into just where this stock can move and with what speed.
It’s the hourly that helps me sniff out an entry.
With volume and overall liquidity in the market being what it is — abysmal — I may have to scale into this one… slowly.
With charts like this and an unforgiving market environment, you’ve got to take what you can get some times, so the accumulation game pays off for those with a great deal of patience.
Notice that the downtrend from the recent highs has been steady and calculated, almost as if the price action is controlled by…
…algorithms.
But that’s nothing new and has been the case since traders were using neural networks in the nineties with other variations preceding that.
Using the Standard Deviation Channel, RELI has reached a little under one standard deviation below the midline (white arrow).
Looking at the hourly, however, we’ve got a reaction off the Pivot Low at the second standard deviation with a “LONG” signal from Chris Hood’s Squeeze Trading Tool 1.0 (set to 15 length).
That’s only in the short term, but an early signal along with a cross into the green ATR Baseline and a cross above the 21ema (neon green stepline)?
This might be good enough to keep the stock on watch…
First resistance is at ~$2.50 with a stretched target to $3.40.
Now, if we want to get really greedy, a break above those targets could fill the daily gap on the Volume Profile by sending it to $4.60 where the red resistance level is located (green arrow).
This one’s about managing expectations.
Keep moving,
(Disclosure: I hold no position in RELI, but intend to initiate a position in the next 30 days.)
This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
