In writing my weekly newsletter this week, I realized that adding in pictures of charts was more work than it was worth and that many people would skip over that party anyway. So, here is a glimpse into the fun thought process behind my trades that you would typically only get in the newsletter.
This first chart has a cluster of overbought/oversold measures on it. Fitbit is just 17 cents above the lower Bollinger Band and both the RSI and Stochastics show over sold levels. It is worth noting that each of these have shown oversold since the stock’s massive drop in November.
This chart shows all the important moving averages. Fitbit’s price is the black and red line on the bottom, up from that is the 20 day ema, 50 dma and 200 dma. It’s obviously bad for the trend that the price is below all three. However, the MACD on the bottom has crossed over the signal line and has diverged from the stock price – both of these are buy signals. When the MACD crosses over zero and/or the stock price crosses over the 20 day ema look for it to jump.