The ADX-PPO Pincher
The ADX-PPO Pincher. To be fair, this TA setup wasnot developed by the Cove and we do not therefore take credit for it.However, we have found it to be an amazingly powerful TA setup toconsider when trying to find a good oversold stock to trade.
In total,the TA Pincher should be considered in conjunction with other TA/FAdynamics. I personally like the Pincher in Combo with the daily growthchart setup on the TA side and several key ratios in combination withSector/Industry dynamics on the FA side.
1. ADX (14) crosses above the -DI line and continues to rise
2. RSI (14) drops below the 30 line while the PPO continues to fall
3.a. As the PPO falls thru the -20 while the ADX simultaneously rises above the 40, a “PINCH” is formed.
(This is the going in condition Set but the indicators do not have to occur in the order presented in the example to be valid)
3.b. The beginning of confirmation happens when the RSI rises up (back thru) the 30
4. 1st attempt to continue fails
5. 2nd attempt for the RSI thru 30
*6. Not part of the Pincher TA, but adapted by the Cove, the SAR is triggered, adding confirmation to the pending reversal
7. PPO crosses up thru the signal line and the mid-bollie (20MA) is breached = early BUY SIGNAL
8. Candle sits above mid-bollie and the PPO continues upward while the ADX continues downward
In total,the TA Pincher should be considered in conjunction with other TA/FAdynamics. I personally like the Pincher in Combo with the daily growthchart setup on the TA side and several key ratios in combination withSector/Industry dynamics on the FA side.
1. ADX (14) crosses above the -DI line and continues to rise
2. RSI (14) drops below the 30 line while the PPO continues to fall
3.a. As the PPO falls thru the -20 while the ADX simultaneously rises above the 40, a “PINCH” is formed.
(This is the going in condition Set but the indicators do not have to occur in the order presented in the example to be valid)
3.b. The beginning of confirmation happens when the RSI rises up (back thru) the 30
4. 1st attempt to continue fails
5. 2nd attempt for the RSI thru 30
*6. Not part of the Pincher TA, but adapted by the Cove, the SAR is triggered, adding confirmation to the pending reversal
7. PPO crosses up thru the signal line and the mid-bollie (20MA) is breached = early BUY SIGNAL
8. Candle sits above mid-bollie and the PPO continues upward while the ADX continues downward
Posted by Cove Reflections at 9/6/2009 9:33 AM 
Categories: Cove Technical Analysis Setup-- Pincher
Tags: TA Technical Analysis Pincher ADX PPO
Categories: Cove Technical Analysis Setup-- Pincher
Tags: TA Technical Analysis Pincher ADX PPO
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