5 Stocks Breakout a Key Moving Average Today

Inside this article you find companies with a potential start/continuation signal of a positive trend according to one of the most used trading tools, simple moving average. In particular, the Moving Average Breakout Chart Patterns. In addition, the companies shown here have a particular chart conformation that increases the probability of the positive trend continuing.

In this article we will consider only the breakout of the 50-day moving average which identifies the presence of a positive (if the price is above) or negative (if the price is below) trend in the medium to long term.

What is a Simple Moving Average?

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The simple moving average of a financial instrument is calculated as the average of the prices of the last trading sessions. The potential signal of the beginning / continuation of the positive trend is generated when the price of the financial instrument rises above (breakout) a simple moving average of key number of past trading sessions (20, 50 or 200)

Real example of Key Moving Average Breakout

Below is a chart of a company that appeared in a “Key Moving Average Breakout” article here on BullDude.com.

Key Moving Average Breakout: Tesla Inc (TSLA)

As shown in the chart above, Tesla Inc (TSLA) breakout a key moving average (200-day, black line) on March 20, 2020, reported in the article published on the same day “3 Popular Stocks Breakout a Key Moving Average Today”. Since that day Tesla Inc (TSLA) has grown by over +220% in just 4 months. The other 2 “popular” stocks included in the article were Amazon Inc (AMZN) which grew by + 70% in the same period of time and Netflix (NFLX) which grew by + 55%.

How do I know if it’s a false breakout?

The breakout is defined as “false” when the positive trend that supported the price growth reverses the direction (going from positive to negative). To understand when this event occurs, there is a red half-line in the chart that indicates the level below which the positive trend can be considered concluded.

A few negative days are not enough to call it a “false” breakout because often the cause is natural temporary volatility (given by the retest of the signal level or profit taking or general market crash).

Key Moving Average BREAKOUT

Simple Moving Average 50-day (black line)

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