Shorting the SMA 100 Resistance Bounce in Semiconductor Stocks since 2018

BE Trader

Junior member
A lot of trades are watching Daily SMA 100 and treat that as a resistance level. I should say I do exactly the same...
I always wanted to measure that quantitatively so that I can trade based on the signal more confidently. Below is an example of the bounce I'm talking about:

Screen Shot 2022-01-22 at 8.49.21 AM.png

To quantify SMA 100 I backtested the idea of bouncing off Daily SMA 100 and going down.
Each day I'm looking for stocks which
  • Belong to iShares Semiconductor ETF $SOXX
  • Have been trading near SMA 100 on daily (97-103% range)
Enter (criteria to open a ⬇️SHORT position): 3min chart
  • Stock price bounces off SMA 100 on Daily
  • Price is going down for 3 bars after at least
Exit (criteria to close a position): 3min chart
  • Price crosses above EMA 50 and stays there for 5 bars or Price crosses above SMA 100 on Daily
  • Stop loss 1%
Initial capital $10,000
  • Gain is reinvested the next day
  • Loss reducing the buying power the next day
  • If there are multiple candidates buy the one with highest relative volume vs 10min average
Results
2022 (as of Jan 22)2021202020192018
+9.8.%+34.23%+0.96% +13.61% +21.18%
Screen Shot 2022-01-22 at 8.53.00 AM.png



Disclaimer: all calculations made using BreakingEquity
 
 
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