TradingMarkets Chart of the Day
For today’s Chart of the Day, let’s take a look at the
Stocks Ready To Surge list published each day on the
Indicator
page. These are the stocks that today made new 10-day lows that are still
in an uptrend as they are trading above their 200-day moving average. They are
sorted in rank according to how over-extended they are vs. their 10-day moving
average. These are classic pullback trades, as an uptrending stock falls
against its own momentum, which could precede a continuation move.
Merrill Lynch
(
MER |
Quote |
Chart |
News |
PowerRating)
has been hovering above its 200-day moving average since the end of July.
MER started to pull away from support to create more upward momentum, but price
has reversed over the last few days, bringing MER back to the moving average.
Watch for price to bounce off of the moving average as price corrects itself in
the direction of the trend. Notice on this chart how much of the trading
action has revolved around the moving average, and keep this in mind when
deciding major support/resistance points.
Use pullbacks to get a better buy-in price for stocks that are
trending.