The Ichimoku Cloud is a versatile indicator that defines support and resistance, identifies trend direction, gauges momentum and provides trading signals. When stocks close below the Ichimoku Cloud a sell short signal is generated. Lets look at the STX 1/6/16 close below the cloud.
The best Ichimoku Cloud sell short signals occur after the stock has consolidated inside the cloud for at least 5 days. STX had a nice 5 day sideways consolidation inside the cloud before closing below it. STX had a nice drop the next 3 days from $34.75 to $30.65, and 15 days later hit a low of $26.25.
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Here are the stocks that moved below the Ichimoku Cloud on 10-24-2016 for trading on 10-25-2016
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