This is a great example of a favorite chart construct of mine. Regardless of the ticker (although I do favor $TTD) I find this chart construction to be very beneficial to keeping things simple, effective and efficient. The following are key takeaways...
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- Top third - Current price, line chart - looking for absolute support/resistance, uptrending/downtrending specifics. --->>> K.I.S.S. mentality here.
- Middle third - Price of underlying vs. $SPXL (in this case) - Relative strength of the underlying security vs. $SPXL gives a great shot of whether or not I even need to be considering a specific holding over $SPXL. I also show the 63 day SMA on this ratio chart.
- Bottom third - RSI of the RS chart (middle third) - the goal here is to look for trending momentum either up or down as well as spotting critical divergences. I find divergences of this magnitude to be more reliable (tradeable) than your average price of underlying divergence. Shown is an example with $TTD..
@dgorghuber (TV)
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Dan J. Gorghuber, CMT