Best indicator for spotting extreme oversold / overbought levels ?

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Old Feb 14, 2014, 12:34am   #1
 
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Best indicator for spotting extreme oversold / overbought levels ?

Hi,
I'm looking for ideas / indicator for spotting extreme overbought oversold level, to act on these area and play counter trend.

Thus far I retained 2 good ones:

- Kelter channels when prices goes out of it
- Current price distance from Moving average

Any better ideas ?

Last edited by Brakkar; Feb 14, 2014 at 12:39am.
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Old Feb 14, 2014, 12:42am   #2
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Moving Average Commodity Channel index (MACCI) in multiple timeframes is as good as any of the others in my view.
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Old Feb 14, 2014, 12:47am   #3
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No sellers / No buyers
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Old Feb 23, 2014, 7:49pm   #4
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Quote:
Originally Posted by Brakkar View Post
Hi,
I'm looking for ideas / indicator for spotting extreme overbought oversold level, to act on these area and play counter trend.

Thus far I retained 2 good ones:

- Kelter channels when prices goes out of it
- Current price distance from Moving average

Any better ideas ?
Huge volume surges to the price down-side that mark panic selling and big number of low-priced shares transferring hands (oversold) and huge volume surges to the price up-side which would point to transfer of big amount of high priced shares (overbought). As a result of huge volume surge we may see a shift in supply/demand balance when one of the group (bullish or bearish) of traders becomes exhausted and cannot support any more current trend. At that point we may see a reversal. You may see nice description of this process at
http://www.marketvolume.com/advance_...t_oversold.asp
this is about my understanding of the nature of overbought/oversold condition and physics which may led to a reversal.

MVO is one of the best indicator which was developed specificaly to track it:
http://www.marketvolume.com/technicalanalysis/mvo.asp

P.S. Oversold/overbought does not necessary mean an analysed security will reverse. It would rather indicate that it is predisposed to trend reversal. It could be recommended to use additional indicators which would confirm beginning of a reversal.

Last edited by Vicorka; Feb 23, 2014 at 7:58pm.
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Old Feb 23, 2014, 11:58pm   #5
 
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Quote:
Originally Posted by Vicorka View Post
Huge volume surges to the price down-side that mark panic selling and big number of low-priced shares transferring hands (oversold) and huge volume surges to the price up-side which would point to transfer of big amount of high priced shares (overbought). As a result of huge volume surge we may see a shift in supply/demand balance when one of the group (bullish or bearish) of traders becomes exhausted and cannot support any more current trend. At that point we may see a reversal. You may see nice description of this process at
http://www.marketvolume.com/advance_...t_oversold.asp
this is about my understanding of the nature of overbought/oversold condition and physics which may led to a reversal.

MVO is one of the best indicator which was developed specificaly to track it:
http://www.marketvolume.com/technicalanalysis/mvo.asp

P.S. Oversold/overbought does not necessary mean an analysed security will reverse. It would rather indicate that it is predisposed to trend reversal. It could be recommended to use additional indicators which would confirm beginning of a reversal.
what a funny site..the two endorsements of americans one from California and one from Texas, both can't write English. They're not real endorsements at all. and what was that about the volume weighted average is a patented proprietary indicator? Its available on almost all charting packages..
is this your site Vicorka?
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