Watch the way the market or a stock reacts to the news. Stocks which are above their 200-day moving average that go up on bad news are likely going higher. Stocks which are below the 200-day and drop on good news are likely heading lower. The rule is if they can’t go up on good news they’re likely heading lower. And if they don’t go down on bad news there is a very good chance they’re going higher.
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David Penn is Editor in Chief at TradingMarkets.com.