Taiwan (TWSE) - Oversold to Overbought Reversal Signal
The percentage of Taiwan Index (TWSE) members trading above their respective 10-day moving average registered an oversold to overbought reversal buy signal on 5/26/21.
THE CONCEPT
The oversold to overbought reversal signal identifies instances when the percentage of members trading above their respective 10-day moving average reverses from oversold to overbought in a user-defined number of days or less. The model will issue an alert based upon the following conditions.
CONDITIONS FOR BREADTH SIGNAL
- If the Percentage of Index members cross below 15%. i.e., reset oversold condition
- If the percentage of Index members goes from <= 15% to >= 90.5% in 8 days or less, then buy
Please see my note from 3/29/21 for more information on the signal concept.
Let's take a look at the current chart and historical signal performance.
CURRENT CHART
HOW THE SIGNALS PERFORMED
Results look good in the 2-13 week timeframe. However, the 1-week results suggest that the initial momentum takes a break in the short term.
With several mean-reversion signals and a new momentum thrust signal, the Taiwan Index (TWSE) looks constructive.
MEAN REVERSION SIGNAL NOTES
Taiwan (TWSE) RSI Buy Signal
Taiwan (TWSE) Bollinger Band Buy Signal
Taiwan - Mean Reversion Opportunity