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Bollinger Bands
A stock's price naturally oscillates around its average. Bollinger Bands show when a stock is statistically stretched — either too far above (overbought) or too far below (oversold) that average.
FlexAI uses this: We enter when price touches the LOWER band in an uptrending stock. That's the pullback entry — statistically cheap, high-probability bounce.
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RSI — Relative Strength Index
RSI measures how fast and how hard a stock has moved recently, on a scale of 0-100. Below 30 = oversold (ideal entry). Above 70 = overbought (avoid entry). We look for RSI below 40 as our entry signal.
FlexAI uses this: RSI below 40 means the stock has pulled back enough that buyers tend to step back in. Combined with the Bollinger Band touch, it's a strong confirmation.
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MACD
MACD tracks momentum — specifically when short-term momentum starts outpacing long-term momentum. When the MACD line crosses above the signal line near a support level, that's a bullish momentum shift.
FlexAI uses this: We require the MACD to be crossing UP near the Bollinger Band touch. This confirms the bounce is starting, not still falling. Without this, no alert fires.
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Volume
Volume tells you whether real money is behind a move. Price up on high volume = real buying. Price up on low volume = weak, likely to fade. Price down on low volume = healthy pullback. Price down on high volume = real selling.
FlexAI uses this: We read price AND volume together, never volume alone. A volume spike with a strong close (buyers winning) is what we need. A volume spike with a weak close is a fakeout.
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Delta — Choosing Your Strike
Delta measures how much an option moves relative to the stock. A 0.55 delta call gains about $0.55 for every $1 the stock moves up. We target 0.55 delta strikes — enough leverage without the decay risk of very low delta options.
FlexAI uses this: Higher delta = more expensive but moves more like the stock. Lower delta = cheaper but needs a bigger move to profit. We target 0.55 as the sweet spot for most setups.
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When to Exit
Most traders destroy gains by holding too long or cutting too early. Our exit framework: take profits at R1 (10-20% option gain in 7 days), or hold for R2 (20-40% in 4 weeks). Always close 90 days before expiration to avoid theta decay crushing your position.
FlexAI uses this: The TREND BREAK alert is your early warning system. When price breaks its last higher high AND volume is declining, that's the signal to exit before the obvious reversal happens.