Stock Trading: What Happens When Stocks Gain for Five Days in a Row?
The S&P 500 has closed higher for four days in a row. The Russell 2000 Index has closed higher for four days in a row. The Nasdaq 100? Basis the ^QQQ^, the Nasdaq 100 is up four days in a row, as well.
Here’s the question.
What happens if and when stocks close higher on Friday? What happens when stocks close higher for five days in a row?
You can read the research yourself in Chapters 2 and 3 of Larry Connors book, Short Term Trading Strategies That Work: A Quantified Guide for Trading Stocks and ETFs.
(If you don’t have a copy, you can download one for free – or have us send you a paperback copy. Just click on the title below and choose your delivery preference.)
Short Term Trading Strategies That Work: A Quantified Guide to Trading Stocks and ETFs
For now, here’s part of Larry’s takeaway from the research on what happens to stocks after they make short term highs.
The press and the investment community are jumping up and down telling us just how great things are during these times. They’re right … except that prices already reflect this. That’s why prices are at new highs.
You can read the rest in Short Term Trading Strategies That Work, now available for free only at TradingMarkets.com.
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Steel stocks noted in yesterday’s 7 Stocks You Need to Know continued to the upside ahead of trading on Friday. In addition to steel names like ^NUE^ and ^WOR^ …
Here are 7 Stocks You Need to Know for Friday
Given the massive gains on Wednesday, it is no surprise to see traders taking profits in both ^MA^ and ^V^. MA and V closed lower by more than 2% after double-digit gains in Wednesday’s trading.
Up nearly 3% and closing back above its 200-day moving average were shares of ^GRMN^. Note that GRMN closed near session lows after being up almost 4% intraday.
Pulling back sharply after rallying to new year-to-date highs on Thursday were shares of ^MKC^. The company reported quarterly earnings on Thursday that were better than analyst expectations.
Closing higher for a third day in a row on earnings day were shares of ^DRI^. DRI is now trading in overbought territory above the 200-day moving average.
Shares of ^BRCM^ have rallied into overbought territory below the 200-day moving average ahead of Friday’s session. BRCM has closed higher for three days in a row.
^FCX^ climbed back above its 200-day on Thursday, gaining for a fourth day in a row and adding more than 2%. Shares of FCX spent virtually all of June below the 200-day.
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David Penn is Editor in Chief of TradingMarkets.com