TradingMarkets Chart of the Day
For today’s Chart of the Day, let’s take a look at the
Stocks Ready To Drop list 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. These stocks are simple pullback plays; we are looking for
strongly trending stocks that pullback against the trend.
Allied Waste
(
AW |
Quote |
Chart |
News |
PowerRating) has
been churning below its 200-day moving average since early August; this is a
technically weak stock. Yesterday AW made new monthly highs, and today
price has extended those gains to move closer to the moving average. Watch
for this rally to fail over the next few days, as the force of resistance and
the power of the trend lead the stock to move lower, in the overall direction of
the trend.
Use pullbacks to get a better price on a trending stock; use
your knowledge of the trend to take advantage of oversold/overbought conditions
on a trending price.