TradingMarkets Chart of the Day
For today’s Chart of the Day, let’s take a look at the
Stocks Ready To Drop list that is published each day on the
Indicators
page. These are the stocks that today made new 10-day highs that are still
in an downtrend as they are trading below their 200-day moving average. They are
sorted in rank according to how over-extended they are vs. their 10-day moving
average. TradingMarkets’ best strategies revolve around pullbacks, which
occur when a stock moves against its trend to exhaustion, and then continues in
the original direction of the trend.
Medimmune
(
MEDI |
Quote |
Chart |
News |
PowerRating) is
in a confirmed downtrend, trading below its 200-day moving average. MEDI
made new 10-day highs on 08/16, 08/17, 08/18 and 08/21. Despite being
underneath its 20-day moving average, MEDI has managed to rally over 2 points.
Watch for this stock to resume its trend, as price becomes more and more
overbought. Be wary of rallying stocks that are trading below their
200-day MA; more often than not they will resume the trend.
Use pullbacks to get a better price before
the stock resumes its original direction.
John Patrick Lee