Profiting From TradingMarkets: Spot Institutional Action Nightly With This Indicator
Last week, we showed you how to use the
TradingMarkets “Trading Where The Action Is” list. This week, we’ll look at the
TradingMarkets “Stocks Crossing Above Their 50-Day EMA On Double Volume.”
Many institutions and hedge funds use both the
50-day and 200-day moving averages as benchmarks to guide them in their decision
making process. These funds prefer to be buying stocks that are trading above
these averages. As they feel that the momentum in these stocks will continue and
help push prices higher.
One of the lists of stocks we provide you each
night are Stocks Crossing Above Their 50-Day EMA On Double Volume. The reason we
use volume is it helps pinpoint stocks that the institutions are buying heavily
into on the day they cross their average. These volume spikes are accompanied by
price spikes which many times precede intermediate term to long term moves on
the stocks.Â
An example would be from Tuesday night’s list where Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating)
crossed above its 50-day moving average on very heavy volume. The buying
continued into Wednesday where the stock rose nearly 3%. Even though this
indicator is not intended to be used for very short-term trading it many times
alerts you to names in the early stages of accumulation.
We also show you each evening
stocks that have crossed below their 50-day moving average on double volume.
These are stocks that are many times under distribution and will potentially see
further selling in the near future.
Both lists should be used in conjunction with other trading strategies you have.
But, they do a nice job of alerting you to the stocks that the institutions are
involved in. If you have any questions on this indicator, please feel free to
e-mail them to us at
lconnors@tradingmarkets.com or
brice@tradingmarkets.com.
Larry Connors and Brice Wightman
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