Predict Reversals Up to 85% of the Time

Trader Fred DeMarco works on the floor of the New York Stock Exchange, Friday, Feb. 28, 2020. Global stock markets are falling further on spreading virus fears. (AP Photo/Richard Drew)

It may be time to trade the short side of Albemarle (ALB) now.

On January 12, we noted, “Every time Albemarle (ALB) gets this oversold, it’s a buy. If you pull up a two-year chart of ALB with RSI, MACD, and Williams’ %R, you can see the opportunity.  Take a look at what happens to the ALB stock every time RSI dips to its 30-line, when MACD drops well under its mean, and when Williams’ %R drops to 80 or below.  About 85% of the time, the ALB stock will pop. Since 2022, it happened in January, February, late April, July, and October, and it’s happening again now.”

Since that note, ALB exploded from $240 to about $292.  That’s a solid return in weeks.

Now, it may be time to trade the short side of ALB—again based on history.

If you pull up a two-year chart of ALB, you can see it’s seeing heavy resistance at current prices. Plus, you can see the over-extensions on RSI, MACD, and Williams’ %R. Just as these indicators pinpointed a reversal higher, they’re now telling us to expect a reversal lower. In fact, these indicators predicted a pivot lower twice in May, August, September, and possibly again now.

The beauty of such a simple technical setup is that it can be used with any stock, ETF, or index.