Technical Analysis Startegy - RSI2 Trading Plan

The following trading signal is based on a modified version from something similar by Larry Connors.

Essentially a market is in a bull market scenario (SMA-200 increasing) but is facing a short term correction (SMA-5 decreasing). Since we are confident it is an uptrending market, undergoing short term correction, we would want to buy more stocks under certain conditions.

The conditions are:

i) Stock price is above the SMA-200, where the SMA-200 is in an uptrend.

ii) The stock price just went below the SMA-5day.

iii) The RSI-2 indicator has just gone below 10.0

..... then buy

The Exit Criteria is 

- when the stock price rises above the SMA-5

..... then sell

Technical Analysis - Bird Flu, Biota and Uptrend

A Bus Driver in Southern China Dies of Bird Flu. Could the Deadly Virus Strike Again?

Hong Kong Urges Bird-Flu

With all the news of Bird Flu perhaps it is time to look at Biota again.

A quick technical look on the graph below shows that it is possibly developing an uptrend. Without any complex technical indicators, price action alone does seem to indicate that things can get interesting and worth a more detailed look. Recall the Weinstein method and the CAN-SLIM method talks about getting in early at such price signals.

The pink smooth curve is the stop signal, the green curve is the moving average, black curve is the main price action.
The smaller graph below is a proprietary indicator showing that it is in an uptrend (RT value > 0.0)

Technical Analysis - Summary of MACD

Below is a summary of the MACD technique to watch for confirmation in trends and possibly reversal in certain circumstances. The following is an excerpt from Andrew Page's article from Trading Tutors.

1. The MACD line signals upward momentum when in positive territory, and downward momentum when negative. Use this to validate an observed trend in price.

2. The MACD line can signal overbought and oversold positions. The further the line deviates away from zero, the more likely it is we will see a correction in price. Try drawing support and resistance lines for you MACD line to work out what levels typically represent overbought / oversold positions.

3. Buy signals are generated when the MACD line crosses above the signal line. Buy signals are reinforced when the MACD line is in positive territory.

4. Sell signals are generated when the MACD line crosses below the signal line. Sell signals are reinforced when the MACD line is negative.

5. Divergence between the price and MACD histogram signal weakness in the trend (loss of momentum). When you start to see the two diverge, look to the other MACD signals to confirm the end of a trend.