Fearzone Panel: Oversold Triggers with a Long-Term Trend Filter

Summary

The Fearzone panel organizes a short-term long-entry setup for stocks around six conditions. Two Fearzone measures flag unusually low readings relative to their historical distributions: one tracks distance below a recent high, while the other measures deviation from a moving average. Three independent triggers are a decline of at least ten percent versus ten periods earlier, a close in the lowest tenth of the current bar’s range, and a slow stochastic reading below thirty. A final filter requires price to be above its 200-period moving average.

The panel displays each condition separately, and the accompanying notes suggest entering only when all are active, taking profit promptly, and limiting the holding period to no more than five periods. The stated intent is very short trades, but the document provides no backtest, sample, or risk-adjusted results. The historical thresholds and indicator settings are fixed in the script, and the setup may behave differently across securities and timeframes. The panel presents a hypothesis for identifying fear-driven selloffs, not evidence that a rebound will follow.

Key ideas

• Two Fearzone measures flag extreme weakness relative to recent price behavior.
• The panel combines three separate entry triggers with a requirement to be above the 200-period average.
• One trigger checks a sharp decline relative to ten periods earlier.
• The proposed setup is for very short trades and suggests a maximum holding period of five periods.
• The source gives no performance evidence that the conditions predict a rebound.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.