TradingMarkets Chart of the Day
For today’s Chart of the Day, let’s take a look at the
Pullbacks from Highs list published each day on the
Indicator
page. Most successful momentum-based traders and money managers like to
buy strong stocks after they pull back. TradingMarkets.com uses a proprietary
mathematical model to identify up to 30 (in weak or choppy markets there will be
fewer) of the strongest stocks that have pulled back from recent highs. These
stocks should be considered potential candidates to resume their longer-term
uptrends. This is a simple pullback strategy that looks to go long on
strong stocks that are pulling back.
Men’s Wearhouse
(
MW |
Quote |
Chart |
News |
PowerRating)
made all-time highs on August 17, and has been consistently trading above its
200-day moving average for the last 2 years. This is a strong stock.
After making the new higs, MW pulled back towards its 200-day moving average and
is now consolidating. Watch for MW to break out and resume its uptrend
once the volume returns to the market. We should see some upward momentum
as this stock pushes out of this pullback.
Use pullbacks to get a better buy-in price
on a trending stock.