Flat Options Analysis Chart
I put this together this weekend after taking a quick look at some stocks and noticing a special period for options.
Taking for example your typical shorted company stocks there's a long downtrend with a few upswings, some recent rises being brief and spectacular.
For instance the underlying data for AMC is messy. The intense January jump made it worse. Market timing is everything and when leveraging options there should be a nice place to get in just before the next big movements start.
All the charts I know of weren't working for me so I created my own.
This is a sort of smoothing of effects for the stock data for AMC. I only care if each week is higher or lower, and gave stronger colors to higher movements between closing and opening. What this chart shows is that it regularly undergoes shorting for 3-4 weeks, hits a dead lull, then trends up.
Most outstanding to me are the LULLS. These are typified by the end of a 3-4 week downtrend, punctuated by a dead stop, where from open to close of the week the stock did not move from the prior week.
AMC is currently in a such a lull which is a prime market for options pickups or cheap stock buys. If following a pattern then it will rise quickly at first starting this week for a good short options play. If the movement is less quick to the upside early, it will break higher in the third week. If week 4 does not show the typical increased volatility, it could be a potential break out indicator as shorts move away.
Does the chart make sense, is it a good tech analysis?
Disclaimer: I have never worked as an employee of a fintech or financial company of any kind.