 okay folks in this video what we're going to do is we're going to go over the chart of snap snap chat symbol s and ap and we're going to talk about how we are overbought relative to the rsi and in fact the bonger bands on not just a daily time frame but on a weekly time frame and we'll discuss the reason why i am bearish on snapchat in the short term but first what we're going to do is we're going to follow up on a video i completed on the 19th of october only a short time ago and i want to re-review the outcome of a chart that i went over of 10x genomics i use it as an example of an extreme nosebleed contrarian overbought stock which was ripe to fall now the video was met with a lot of good positive feedback the ratio of likes versus dislikes was very high i had one dislike why he didn't like the fact that i was saying the stock was going to go down i had nothing to do with the content of rsi now why do i make these videos the reason is is i put myself out there in advance of an anticipated move in a stock why it's that when somebody takes a look at my results or if they take a look at my videos they know i come from a place of honesty i make the call in advance of the price move that way i can go back in time and say this is what i said then that way you know it's date stamped by a third party whether it be youtube twitter stock twitch whatever it's validated unlike my competitors out there who want you to believe with a spreadsheet these are my returns or they want you to take a look at their brokerage statement which may or may not have been photoshopped and tell you after the fact when the trade has been made how much money they made a i don't talk about the dollars that we make or lose on a trade i talk about percentage terms gains or losses because i don't want the hype i don't want to feed that to people i would rather educate and have people want to do business with me because of what i have to offer in terms of education not Lamborghinis but lessons so let's begin with what i had to say with regards to the share price of 10x genomics on the 19th of october prior to the recent move and i would encourage you to please watch the video of my rsi strategies i'm going to link to it at the end of this video and i'm going to link it down below in the video description area and if you stick around for the entire video at the end of this video i'm going to give you a stock that is in a macro meaning quarterly yearly rsi bubble it's a big stock everybody knows it over the age of 10 if not over the age of five to be honest with you so stick around enjoy the video if you have any questions leave a comment below and please like share whatever enjoy the video talk to you soon that's the Bollinger band strategy the fifth and final strategy i mentioned earlier and it's really what inspired me to create the contrarian trader back in 2005 and we have trained thousands of members on how to learn how to use technical analysis learn how to use discipline to identify opportunities in the marketplace with reduced risk and maximized reward and the strategy i put together was the contrarian trading style and what that combined was primarily the rsi at times the bollinger bands but in all cases candlesticks and volume and the mac d now the mac d is a lagging indicator however it validates what i'm seeing on the leading indicator being the bollinger band and primarily the rsi and as a final bonus i'm going to leave you off with a very popular stock and it's a stock that anyone over the age of 10 has definitely heard of but it is in an rsi bubble and i'm going to leave you off with that so stick around to the end now the first example of an extreme overbought stock which is what the contrarian trading style is all about finding extreme overbought and extreme oversold stocks to trade because the probability of once you have rsi greater than 90 the probability of it being sustainable for the longer term is unlikely you're going to get a reaction to the downside at some point in time i can do far more in-depth detail about this trading style if you're interested please leave a comment below but i don't want to get too in-depth with it right here right now because this is a video regarding the rsi primarily but this is an advanced strategy i would strongly encourage you to not trade this style until you've watched future tutorials from me because there are a lot of nuances on how to trade extreme overbought extreme oversold stocks using the contrarian trading strategy now example number one 10x genomics now oddly enough i was long of this stock not too long ago and i booked profits on or about here where we pierced the third standard deviation bologna man so we left some money on the table as the shares continued higher but the market became shaky and when i see a stock begin to show me a profit and the market is a bit shaky i invoke my old traders adage first out best out and that's what we did here but in this case we left a little bit of money on the table but we are looking to short 10x genomics based upon rsi candlesticks and let's bring up the mac d and volume now my settings here on rsi to revisit are at 14 day rolling period upper band 80 lower band 20 not the upper band 70 not the lower band 30 as suggested to be used by the books written many many years ago remember we're dealing with rsi now 21st century we need to up our game that's why we're using these new upper bands and i hope that in in updated volumes of getting started in technical analysis which is a very very good book overall i use it to this day i hope that they update in the next volume overbought 280 and oversold 220 now here with rsi you still have rsi validating with a move higher that the shares are very strong the problem is is that what we did on the last trading day which was a friday is that we did break out but we faded along with the rest of the market and while this is becoming an interesting short we're not there quite yet but we're very close now to really drive home how out of date the 7030 rule is for overbought oversold i'm going to adjust this i'm going to change 80 because i'm open minded to the fact that you know what 80 may be getting a little bit older now and we need to revisit it what about if we change this up to 90 take a look at where rsi is right now we are at 89 spot 89 on the last close and not only that we broke out the last trading day above resistance with rsi well above 70 well above 80 close to 90 this is why again i hate to keep pounding this home but the old way 7030 rule out the window that myth is now busted i don't want to see anyone lose money now the catarian trading style what we look for here is not only our primary primary indicator trading above the 80 mark what we're looking for are signs by the market that we're beginning to see price action weakened as you saw this past trading day we had broken out on that day but faded to close well off the highs of the day but that in and of itself is not a short signal we are close we're also looking at volume volume was very light on this particular trading day it wasn't institutional distribution that may resume the next trading day and we may see higher volume in a break of the support level that would have me much closer to shorting the stock if that were to happen and one of the one of the other indicators which is the lagging indicator which is the mac d what you're seeing here are i don't use the lines i use the histogram the mac d histogram what you're seeing here is momentum which is lagging waning it's declining these are the indicators that we must see declining up volume rsi well over 80 and price action beginning to fade and ideally on an entry day basis we'll use a 30 minute chart on an entry day basis to identify whether or not we're beginning to see signals by the market that we're beginning to put in lower highs and you can see here that we clearly are lower high and what's rsi doing breaking down to lower highs you can see how we close down below it and now we have lower lows so the intraday or the internals of 10x genomics indicate that if you are long you should be booking profits because the rsi on a daily time frame on an intraday time frame is sending you a signal to get out because you're probably going to see shorts lean into the shares and you're going to see some institutional profit selling in the very near term so that's what i had to say back on october the 19th of 2020 with regard to 10x genomics using rsi extreme overbought contrarian trading strategy and now for the remainder of this module what i want to do is i want to talk about how that extreme unsustainable overbought condition played itself out then we're going to talk about a very similar stock in terms of being at extreme nosebleed overbought levels and that's going to be snap ticker symbol s and ap we'll do the same analysis the same deep dive on snap as we did with 10x genomics and then i'll leave you off with that bonus stock at the very end of the video which is at extreme nosebleed overbought rsi bubble levels and everyone knows the stock but the pin and the bubble are not recognizable to most because they're not using the charts that we are so stick around let's get to 10x genomics i'm going to begin here where we left off using an intraday chart a 30 minute chart and that was right here on the 19th what happened the very next trading day when the shares reopened they rallied they failed to make new highs and once we broke back down to a new lower low it was all over the markets were sending you a signal that there were not enough bulls to take out prior highs and in fact there were sufficient numbers of bears to take the shares back down below key support this is a very short term micro using a 30 minute chart a micro double top and here on the 20th of october a confirmation breakdown so we began analyzing this trade using a daily chart let's see how it played out from a higher level view that 5000 foot view here's the daily chart and the qualifier to make it onto our screener as a short trade was rsi at extreme nosebleed levels where do we peak out on rsi we actually peaked out on the 16th of october i recorded that commensary on the 19th of october there's a weekend involved there so technically we had already put in the highs on rsi which was at let's round it off to 90 we were just actually just shy of 90 on rsi now remember i'm going to take you back and if you didn't watch that first tutorial i referenced i published on the 19th i suggest you go back to it we busted a myth with regards to rsi being over 70 as being overbought rsi went above 70 right here on october the fifth now what if you would have went short of 10x genomics using rsi above 70 as overbought you would have more than likely have been forced out of the trade by a broker if he did not use a stop loss order and had you not been stopped out then you would have sustained a very large loss and to this day you still would have not have made it back to even money that's why it pays to wait for rsi trading well above the 80 mark but you need to use in conjunction with the rsi price action meaning are we showing signs of topping action i already went over the 30 minute chart let's go back to it going back here where we peaked out on the 16th lower high on the 19th that was an indicator that we may in quotations may have a double top it's not a double top no matter what time frame you're using weekly chart monthly chart daily chart 30 minute chart doesn't matter you need a confirmation this was your confirmation candlestick right here on the 20th that it was probably all over this would have been your cue to lean into the short side at a bare minimum ideally you would have had a trailing stop loss order set you would have let the market take you out of the trade or you would have just manually stopped out now since i've made that commentary right here on the 19th of october the shares have fallen from a high of 166 spot 31 to a recent low of 141 spot 33 and it appears as though we are going lower here that is the power of the rsi and using the contrarian trading strategy to drive consistent results but you need to know the nuances of the trading style that's what i teach members now let's go to our new trade that we're looking to short that is snap ticker symbol s and ap if you're under the age of 25 i don't know how you don't know about this stock everybody loves it they just reported earnings let's talk about it now this trade here this is a daily time frame this trade here actually fits into two of our strategies one the bolinger band strategy if you want to take a look at the entire video with regard to my rsi strategies look below there will be a link for that entire video it's a bit lengthy but the feedback has been that it's worth to watch and in fact vid iq which is a vendor of youtube marked the engagement of viewers as incredible that's the highest score you could get back to snap daily time frame so the bolinger band strategy requires that rsi and in fact on the contrarian trading style requires that rsi be well above the 80 mark have we checked those boxes well let's begin with the bolinger bands the three standard deviation bolinger band not the two standard deviation bolinger band are we trading above it yep check that box bolinger band strategy in effect also rsi needs to be above 80 where is rsi on a closing basis as of the close on the 23rd of october rsi is at 92 spot 15 love it check that box we're good to go here now the problem is with snap historical resistance above on a monthly time frame so we don't have overhead supply meaning sellers from the past coming back and looking to get made whole by selling their shares in our corner we're dealing with the stock that is at all time highs that could leave shorts with a bloody nose if they don't play it right by using the technical tools at their disposal our strategy and of course in the end it all comes down to the individual's ability to display patience and i was not born with patience and believe me in terms of the stock market i paid a lot of money to learn how to invoke the value of patience into my trading style so in short bolinger bands and rsi are telling us we're not supposed to be here add to that on a weekly time frame we are trading well above the third standard deviation bolinger band with an rsi of 87 so on a daily time frame we have an extreme overbought stock that is at nose bleed unsustainable levels which is also validated on the weekly chart so all we need to do now is stalk our prey and what i like to do at times like this is go to the intraday charge and see whether or not are we seeing signs of technical breakdown at current and i have to say no i think we're moving up higher here very short term but that's going to be an opportunity this is a 30 minute chart take a look at how we closed out the day on friday i'm recording this on a weekend 30 minute chart nice consolidation closed strong on the session very close to all-time highs and in fact at all-time highs so the probability of us making higher highs into the new trading week is quite high but that's why i'm going to be looking to lean into the short side to take advantage of amateur money chasing this stock at unsustainable levels do i believe that snap is going to crash no of course not kind of pull back 10 percent 20 percent absolutely so numbers more to come on this trade now as i promised earlier i'm going to segue over into a stock which i believe is in a rsi bubble everyone knows this stock so here you go take a listen and enjoy now i promised you that i would leave you off with an extreme overbought stock that everyone knows and it is a bubble and that stock is drum roll please microsoft that's right microsoft is in a bubble this is a daily chart i need to use stock charts dot com which is a very good software as well but it's falling behind trend spider which again 35 discount code below because trend spider has so many more features now than stock charts dot com anyway i can get time frames on stock charts dot com that is soon coming to trend spider which i'm going to go through in a moment so you may be saying i don't see a bubble here bob what are you talking about the chart looks pretty good yeah it's it's pulled back a little bit this past trading day on a friday but otherwise we're close to a breakout on microsoft and i won't argue with you however what we do here at the contrarian trader is we use multi-time frame analysis meaning if i'm going to buy a stock like microsoft as a potential breakout trade i don't care about the daily chart than many do i care about the higher level charts meaning the daily chart is a view of the battlefield from a five thousand foot view whereas a weekly chart this is your view from a ten thousand foot view of the battlefield and you could see strong up trend but it's this chart that begins to tell us a story not the daily chart keep an eye on the rsi rsi peaked out on microsoft the week of february the 10th it sold off due to covid rallied back and ultimately broke out to new all-time highs there's a problem though as you fast forward to present day and you look back ever since february rsi has been putting in lower highs and now lower lows despite the fact we've been putting in all-time highs that is a bearish divergence we went over bearish divergences earlier but this is not why we have a bubble i'm not done yet we have more let's move back a bit let's go all the way to a quarterly chart now we're talking about the fifty thousand foot view of the battlefield and this is where we enter bubble territory rsi and microsoft on a quarterly basis is at 92 spot 86 think about it microsoft a company worth over one trillion dollars has an rsi of 92.86 does this mean i'm going to short microsoft on the next trading day not yet i'm going to wait for the break the charts the price action rsi stochastics they'll tell me when it's time but what i'm doing is i'm using the quarterly chart and rsi as a qualifier it gets better let's further validate using what i taught you earlier the bolinger band strategy on a yearly time frame now we're talking about 100 000 foot view of the battlefield on a yearly time frame we have rsi at 93 spot 76 all-time highs and probably one of the most overbought stocks on the universe and when you take a look at the bolinger bands the bolinger bands i mentioned earlier that out of the box you have a two standard deviation bolinger band that's in green i use a three standard deviation bolinger band that's in red we have traded for the past four years above the third standard deviation bolinger band folks we're not supposed to be here microsoft is a bubble so that i hope that if somebody's watching this a year two years from now you're looking back saying my god the guy was right if you're if you're watching this two years from now this is october of 2020 please leave a comment saying whether or not i was right hey folks i hope you enjoyed the video and if you did get some value out of it please smash that like button subscribe follow me on whatever social media platform you watch me on and i want to say thank you for taking time out of your day to watch this far everybody have a very great remainder of your day and a profitable trading week be well