Bullish MACD Divergence -Trade Analysis IWM

The Options Hunter Approach is based on four distinct aspects 

Step 1: Divergences in technical indicators warn that the current trend is losing momentum in the short term. The stock or index is making new highs or lows, and the MACD indicator does not confirm new highs or lows, which is known as a divergence.

Macd Divergences can be Bearish or Bullish and signals to option traders a potential opportunity for extraordinary gains. Divergences can occur in any timeframes and with many indicators, but we’ll address multiple timeframes in-depth shortly.

The Options Hunter approach focuses on divergences between the MACD and the price action. We don’t employ other indicators such as RSI, Stochastics or Bollinger bands as we keep our approach simple, straightforward, and repeatable

15-minute Chart

In this example, we’ve identified a Bullish Divergence on...

Bullish MACD Divergence -Trade Analysis NIO

The Options Hunter Approach is based on four distinct aspects 

Step 1: Divergences in technical indicators warn that the current trend is losing momentum in the short term. The stock or index is making new highs or lows, and the MACD indicator does not confirm new highs or lows, which is known as a divergence.

Macd Divergences can be Bearish or Bullish and signals to option traders a potential opportunity for extraordinary gains. Divergences can occur in any timeframes and with many indicators, but we’ll address multiple timeframes in-depth shortly.

The Options Hunter approach focuses on divergences between the MACD and the price action. We don’t employ other indicators such as RSI, Stochastics or Bollinger bands as we keep our approach simple, straightforward, and repeatable

Daily Chart

In this example, we’ve identified a Bullish Divergence on the MACD indicator in a striking contradiction to the...

TRADERS WORLD: How did you get started in trading options?

Dale: I began trading options in the mid-1980’s. I read every book I could find about options...

Can't really miss these divergences on the hourly charts of CVX and XOM and picking up the out of the money option before the close on 9/15/20 was perfect timing.

Entry in the last 30 minutes of the trading day as the stocks just started turning up was ideal. The  XOM September 18, 37.5 calls could have been  had for 11 or 12 c. The next day they were as high as 83c. An alert trader could have taken 500% gain, and with over 2500- 3000 contracts trading a day the spread was reasonable.

The CVX September 18, 79 calls could have been had at a similar time to XOM in last 30 minutes of the trading day for 12c or so. By the next day they traded as high as 1.06. Spread wasn't as nice as XOM as volume was 300 - 500 contracts but again 500% gain was easy to make.

In spite of the bad news on retailers, I see many with strong monthly MACD chart divergences: BBBY, which I showed weeks ago in class & also LB, BGFV & many others. How can YOU find these before they begin their strong up moves? By doing exactly as I teach!

With all of the major components like AAPL, MSFT, AMZN down, it must be putting pressure on the indexes that they are a part of & how about Volatility(VXX)? Is is showing any clear upside patterns? What about the short indexes like SPXS & QID? Do we get “confirmation” from these?

VXX 30 minute MACD divergence 7-23-20

SPXS 30 minute MACD divergence 7-23-20

QID 30 minute MACD divergence 7-23-20

At 1:45pm eastern on June 12 the 5 minute chart on VXX made its way to the high it had reached 2 3/4 hours earlier, but we were concentrating on the MACD indicator. The MACD had a clear divergence indicating that the price action on VXX shouldn't be at $45 but more like $40 or lower based on the slope of the MACD peaks

As predicted the price dropped to below $40. this powerful move down is often reflected with a reverse MACD divergence up on the SPY. In this instance as the chart below clearly shows, there was not one in the offering. So we went back and looked at the VXX puts for big gains on the near term OTM options.

So, I'm sure there are many options traders, who are now at home and work, maybe even have a full house of family members. My commitments used to disqualify me from doing intraday options trading, not anymore, now I'm trading on intraday charts looking for MACD divergences and double tops and bottoms like the Options Hunter does. 

I'm no Dale Wheatley, I'm still learning and cautious with my trades but I can tell you for a fact that this strategy works for me, it really does. The daily chart of BA had a strong MACD up that really gave the confirmation of the 5-minute divergence Dale looks for.