by Philip Wu
When using the Owl Bundle on Thinkorswim to identify trade opportunities, we adopt a "Logic chain" approach that involves analyzing sectors and the symbols within them. To do this, we examine the S&P500 sector ETFs and rank them according to Rstat/MyRisk from highest to lowest. In our analysis, XLY, XLK, and XLC emerged as the top three symbols. We also noticed that they triggered several indicators such as the Doji, Autoframer reward to risk (AF R:R), highly negative RLFF delta between value (RL270) and price(RL10), and abnormal volatilities on Z5 and Z1. In addition, XLY and XLK showed high Frog Quality Number (FQN). These indicators suggest that these symbols are in a "critical state" and are likely to experience significant movement either upwards or downwards.
XLY, XLK, XLC identified as the top 3 from a Rstat/Myrisk reward to risk.
In looking at the 30 min charts on XLY, XLK, and XLC, the symbol XLY looked the most interesting. We see a bullish divergence between XLY and the MACD RL10. In addition we see a “Harshwinter” condition.
The next step is to look at the top 10 holdings in the XLY ETF. These symbols in the XLY ETF are ranked high to low based on Rstat/Myrisk. From this list, NKE and TSLA stand out. They both triggered the Doji, AutoFramer (AF R:R), highly negative RLFF, and abnormal volatilities on both Z5 and Z1.
NKE and TLSA stood out as the top two based on Rstat/Myrisk
In looking at the 30 min charts on NKE and TSLA, they both look good for an intraday long entry if the PSAR flips to the bullish side, or a continuation breakdown to the downside.
NKE on the 30 min chart 2/24/2023, showing bullish divergence between price and MACD.
TSLA on the 30 min chart 2/24/2023, showing bullish divergence between price and MACD
Based on the analysis method described above, and assuming there are no major news events that would impact the analysis, it appears that NKE and TSLA are in a compounded critical state and likely about to move higher or lower quickly.