**This is a theory in the works. Do not play with real cash, or you may get burned**
I started playing regular pinch plays a while ago ( gotta give kudos to Rock Sexton the Pinch King ).
What is a pinch play? In a regular pinch play, the PPO trends along with the stock price, but the ADX goes away from the stock price, and when it crashes, the PPO & ADX pinch together showing a possible oversold condition.
Stack your charts in the following order:
When the stock gets oversold, the PPO & ADX pinch together showing you an entry into a bullish position:
I'm more of an options trader than a stock trader, and every options trader knows that a stock falls faster than it goes up, so I thought..what makes a pinch...what causes it to crash to begin with, and can I get into put options prior to it dropping like a dead duck during hunting season?
In a healthy stock, the PPO & ADX trend along with the stock price:
A reverse pinch play stack your charts in the following order:
This will show you when a reverse pinch is starting, and a possible play to the downside: