Under 30 RSI scan test results
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So let’s get into this Under 30 RSI strategy. As I mentioned in my previous post, given the recent state of the market, I made an Alert to watch out for quality stocks that had fallen Under 30 RSI for at least the past 3 days — the script for that Alert is in my previous post.
Two stocks that I tested this on were $TRUE and $SAVE. With their prices being below $5 they were basically penny stocks. So I decided to give it a go. Here are my results and my thought process.
$TRUE — True Car
$1.82 Cost Average — UP 49.45%
Back at the end of October I bought a few shares of $TRUE at $1.89 after it had formed a bottom… but it dropped even more so I DCAed down and picked up more shares at $1.80 a few days later (which brought my average cost to $1.82).
The reason I thought $TRUE, who deals in the used cars business had future potential was what I saw happening in the Cars Sector. The pandemic really affected the cars market first with supply chain and semiconductor issues, then with a flood of people getting back on the road who had sold their cars during COVID either because they weren’t using them or they just needed money. Also people were opting to buy new cars over used because the used prices were so inflated that for a few bucks more you could get a brand spanking new car, so why wouldn’t you? BUT lately that’s been cooling off and it seemed that next year the used markets would correct and be back to a closer state of normal. Here’s a few videos that talk about this:
With $TRUE’s price being so low and looking at it’s previous price history, it seemed like there was a lot of upside to this trade. And that indeed turned out to be the case. I just closed out the position up 49%.
$SAVE — Spirit Airlines
$9.80 Cost Average — CURRENTLY UP 14.33%
Despite all the amazing memes about Spirit Airline (pause for meme break)
(…aaaaand we’re back!) the airline is still one ofo the most affordable options when it comes to air travel. Now the stock is currently beaten down because the DOJ is trying to block it’s merger with JetBlu $JBLU but the way I see it, the damage from that news is done. Either the DOJ will fail and the merger will go through and the stock will soar OR it will be blocked and go back to business as usual which looking at past data shows that this current price has a lot of room to take-off (see what I did there… twice!).
I bought in when I made my last post at $10.94 and the price continued to drop. So I “bought the dip” at $10.73 to DCA down but the stock continued to plummet. I picked up more shares at $9.60 and $9.15 to DCA down even more — bringing my Cost Average to $9.80 per share.
The stock is on the rise and the position is currently at roughly 15% gains with a lot more room on the upside!
Given that both of these tests proved rather successful, I’m going to continue to test this Under 30 RSI strategy focusing on quality stocks that are serverly undervalued and borderline penny stock — mainly with prices under $10 a share … maybe $12 at most.
Trade long and prosper!
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