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 trend continuing.
Simple Moving Averages BREAKOUT
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).
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).
The information in this article is for informational purposes only and does not constitute investment advice.
Simple Moving Average 20-day (blue line)
Roku Inc (ROKU)
Chegg Inc (CHGG)
Home Depot Inc (HD)
Dropbox Inc (DBX)
Simple Moving Average 50-day (red line) & 200-day (black line)
Guidewire Software Inc (GWRE)
Vertex Pharmaceutical (VRTX)
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