{"id":1188,"date":"2023-08-26T12:09:26","date_gmt":"2023-08-26T06:39:26","guid":{"rendered":"https:\/\/www.definedgesecurities.com\/trading-strategies\/?p=1188"},"modified":"2025-07-18T21:10:07","modified_gmt":"2025-07-18T15:40:07","slug":"pmox-oversold-overbought-pullback-trading-strategy","status":"publish","type":"post","link":"https:\/\/www.definedgesecurities.com\/trading-strategies\/pmox-oversold-overbought-pullback-trading-strategy\/","title":{"rendered":"PMOX Pullback Strategy"},"content":{"rendered":"

PMOX<\/strong> is a unique indicator developed by Definedge, based on Point & Figure (P&F) charts.<\/p>\n

It is constructed using the Xs, Os, and vertical column structures of the P&F chart, and functions as both a momentum indicator<\/strong> and an oscillator<\/strong>. PMOX helps identify strong trends as well as pullback trade opportunities.<\/p>\n

A common issue with many oscillators is that they remain in overbought territory even during strong market trends, making interpretation difficult. PMOX addresses this limitation<\/strong> by combining trend strength analysis with recent price swings.<\/p>\n

It measures the strength of short-, medium-, and long-term trends, as well as the intensity of recent price movements.<\/p>\n

PMOX levels of 75 and 25<\/strong> are considered extreme.<\/p>\n

Green and red dots appear at these extreme levels to signal key momentum conditions:<\/p>\n

A green dot below 25<\/strong> indicates bullish pullback opportunity. When the column reverses, it signals a bullish trade opportunity. A suitable stop-loss can be placed at the double bottom sell pattern or below D Smart indicator.<\/p>\n

Below is a possible strategy for using PMOX in the Momentify Trading setup.<\/p>\n

Strategy Name:<\/strong> PMOX Pullabck Strategy<\/p>\n

Stock Group:<\/strong> Your choice<\/p>\n

Allocation:<\/strong> Your choice<\/p>\n

Number of Stocks:<\/strong> Your choice<\/p>\n

Rank Criteria:<\/strong> Return Percent or Volar<\/p>\n

Position Size:<\/strong> Fixed<\/p>\n

Ranking Period:<\/strong> 252<\/p>\n

Retracement:<\/strong> Within 50% of 52-week high<\/p>\n

Moving Average Filter:<\/strong> 200-EMA<\/p>\n

Entry Condition:<\/strong> PMOX Bullish Pullback Breakout (1%)<\/p>\n

Exit Condition:<\/strong> Below D Smart<\/p>\n

Market Trend Filter:<\/strong> Change the exit strategy to Double Bottom Sell or High Pole when Nifty turns bearish, or when X% breadth rises above 75, or X% breadth falls below its moving average.<\/p>\n

Please note:<\/strong> When using Point & Figure charts, the box-value can be defined based on the stock universe:<\/p>\n