TradingMarkets Chart of the Day
For today’s Chart of the Day, let’s take a look at the
Pullback from New Highs List 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.
General Motors
(
GM |
Quote |
Chart |
News |
PowerRating) has
been in a confirmed up-trend since May, riding high above its 200-day
moving average.
Last week, on July 26, GM made 9-month highs, trading as high $33.06.
After hitting those highs, GM issued a small pullback, losing about $3 over the
next week. Look for GM to continue its move up and test resistance at the
new highs. Yesterday the stock closed at the very top of its range, also a
very bullish signal.
Remember: Pullbacks are
great opportunities for buyers to get in at a better price. When a strong
stock declines for a few days towards its support, do not lose faith.
Instead, get ready for the stock to pop and continue in the direction of its
trend.
John Patrick Lee