ℝeal Street Analysis Development.
Technical indicators have been used for years to determine potential buying and selling points for stocks. Commonly used indicators like Bollinger Bands and Relative Strength Index (RSI) are designed to highlight overbought and oversold conditions for stocks when the indicator or stock price enters certain ranges. In the case of RSI, for example, conventional wisdom says to buy when a given stock RSI drops below 30 or 40 (oversold), and sell when the RSI rises above 70 or 80 (overbought). Is a better entry point at RSI levels of 30 or 40 or somewhere in between? Does the stock rebound every time it reaches an RSI of 30 or only sometimes? How often? How much does the price increase after reaching a 30 RSI level and how fast? What is the maximum increase over the last 10 years when the stock reached RSI levels of 30? What's the minimum and average return?
The primary objective of ℝeal Street Analysis is to provide more clarity to the questions posed above by applying statistical analysis to illustrate the effect on stock price returns when a technical indicator such as RSI or Bollinger Bands falls within the "buy" or "sell" range. The data tables on the Home page and Historical Tables page provide these price return statistics for stocks that have technical indicators in the overbought and oversold range as of market close. The tables analyze stocks from the S&P 500 as well as sector specific ETF's each day at market close and post the statistics for stocks that have been flagged as having technical indicators in the overbought or oversold range for that particular date. Eight common technical indicators are used for the daily analyses and each set of technical indicator variables are optimized for each stock in an attempt to provide maximum and minimum return rates. The return rates are calculated based on 5 (trading) day averages after a technical indicator falls within the activation range for the stock denoted by a "hit" on the graphs. Each graph plots the technical indicator, stock price and optimal range for maximum and minimum returns for that technical indicator. Each time an indicator falls within the range, the 5-day average returns for days 1-5, 6-10, 11-15 and 16-20 after the event are calculated and posted. These 5-day averages are also posted at the top of each graph.
As institutional investing becomes more influenced and governed by algorithms and AI, trades will be activated by rules. Popular technical indicators will likely play some role in determining entry and exit points. Each trading day, numerous stocks post ± 1% (or greater) returns. $10K can become $1 Million in less than 10 years with 1% weekly returns compounded weekly. While not an easy task, it's theoretically feasible. Find your 1% today.