TradingMarkets Chart of the Day
For today’s Chart of the Day, let’s take a look at the
Pullbacks From Lows list published each day on the
Indicators
page. Most successful momentum-based traders and money managers like to
sell weak stocks after they pull back. TradingMarkets.com uses a proprietary
mathematical model to identify up to 20 (in strong or choppy markets there will
be fewer) weak stocks that have pulled back from recent lows. These stocks
should be considered potential candidates to resume their longer-term
downtrends.
Sante Fe Energy
(
SFF |
Quote |
Chart |
News |
PowerRating)
made new lows on September 15, after trading in a confirmed downtrend, below its
200-day moving average, for about two weeks. Immediately after making the
new lows, the stock initiated a pullback, pushing up towards its 200-day
average. Watch for this rally to fail and the stock to continue in the
direction of the trend, as the weight of the moving average forces price to move
in the path of least resistance.
Use your knowledge of pullbacks to get a better price on your
buy-in.