Sector Rotation Signals

📊 Variables

Let:
RSt = Relative Strength of the sector vs benchmark at day t
Formula: RSt = Closesector,t / Closebenchmark,t
n = Look-back period (10, 50, 200 days)

🧮 Pivot-Point Formulas

📘 Applied for Each Timeframe

The above formulas are calculated for:

• 10-day window → Pivot10, Support10, Resistance10
• 50-day window → Pivot50, Support50, Resistance50
• 200-day window → Pivot200, Support200, Resistance200

✅ Interpretation

📦 Summary Formula Set

RSt = Closesector,t / Closebenchmark,t
Pivotn = (RSHigh,n + RSLow,n + RSClose) / 3
Supportn = 2 × Pivotn − RSHigh,n
Resistancen = 2 × Pivotn − RSLow,n
        

🕯️ Definition – Bullish Engulfing Pattern

The Bullish Engulfing is a two-candle reversal pattern that signals a possible trend change from bearish → bullish.

📘 Variables (weekly or monthly)

• Open_t = Opening price of the current candle
• Close_t = Closing price of the current candle
• Open_t−1 = Opening price of the previous candle
• Close_t−1 = Closing price of the previous candle

🧮 Mathematical Conditions

A Bullish Engulfing pattern is True if all of these hold:

1. Closet−1 < Opent−1 → previous candle is bearish
2. Closet > Opent → current candle is bullish
3. Current body completely engulfs previous body:
   Opent < Closet−1 and Closet > Opent−1

If any condition fails → False.

📈 Timeframe Application

• Weekly Bullish Engulfing = True if pattern appears on weekly candles
• Monthly Bullish Engulfing = True if pattern appears on monthly candles

📦 Summary Logic

Prev = bearish ( Closet−1 < Opent−1 )
Curr = bullish ( Closet > Opent )
Body engulf = Opent < Closet−1 and Closet > Opent−1

Bullish Engulfing = Prev AND Curr AND Body engulf