An unexpected strong rebound driven by bargain hunting in the oversold zone

Reviewing Prediction vs. Actual Result

At the time of entry, the RSI stood at 30.6, placing it near oversold territory, and a take-profit target of $3046.47 was set based on the potential for a rebound near the 20-day low support line ($2796.85). The projected return was conservatively set at 1.2%, but the actual result recorded a return of 11.3%, resulting in an OVERHIT rating. While it correctly identified that strong bargain hunting emerged despite the downward trend as trading volume surged to 1.94 times the 20-day average volume, it is regrettable that the target price was set too low due to an underestimation of the magnitude of the rebound and the persistence of the momentum.

What to Watch in the Next Analysis

We confirmed the validity of the approach capturing rebounds near the oversold territory and major support levels. However, when a trend reversal occurs with volume higher than the average, rather than settling for a conservative take-profit price, we will complement our trading plan to capture larger profit margins by employing a scaled-selling strategy or flexibly opening up the upper resistance line.