The Semiconductor Index $SOX (SOX) is a study in trend investing. Several items of note:
- it traded above our trend filter starting back in April and May
- above filter, then made a series of 21 day breakouts, 17 signals to be exact
- then an all time high on Sept. 2nd
- sold off into a 21 day low on Sept. 8th
- the low stuck. That was the bottom of that sell off.
- 3 consecutive 21 day highs were issued beginning Oct. 8th (breakouts)
Btw this can be done using the stockcharts website for free. No need to register and sign into your brokers webcast. No need for the “news”, or anything else.
The abbreviated stock chart below shows the swing into the 21 day low on Sept. 8th (red signal), that held, and the subsequent 21 day highs in Oct. (blue signals).
Trend investing is reactive, not predictive.