Uptrend
on stock market charts
You, as a stock trader, will want to identify stock in an uptrend to find a possible candidate for a long trade. Stock market is not moving only up. There are periods when stock market is in decline or in sideways move. But when you find that general stock market is in bull trend, then it is much easier to trade stock which are also presenting itself with rising price. It is absolutely critical to understand that there are different stock market trend situation. Good and profitable trader / active investor do not use only one stock trading strategy (like buy pullback for any stocks). Such strategy works well in bull market but fails in bear market or in sideways market.
How to identify uptrend
on stock market charts
I look for these indications on a stock chart during a stock trend analysis to identify bullish situation: - The price is rising
- Corrections (pullbacks) are not as strong as rising moves.
- There are higher highs (HH) and higher lows (HL) on the chart.
- Volume during rising periods is higher than during corrections.
You can find them on this chart:
As you can see,
moving averages
can help you visually identify an uptrend during your stock trend analysis. Do you see that price is above all important moving averages and 20EMA is above 50EMA? Both these pieces of info are available on this chart and provide you additional hints for easier reading a stock chart.
What is good stock trading strategy
for such situation ?
There are several options how to trade rising prices. First you have to identify what is
prevailing stock market trend.
Are we in bull market environment or in bear market?If we are in bear market and you look at stock price chart with rising price then it is possible to decide that such stock is relative strong to general market. It is good to avoid such stock for sell short entry. Much more profitable could be to buy such stock. But when stock market charts are bearish then buy setup for this stock should be conservative. It is good to plan only
half size position
and be conservative in
specifying target.
If we are in sideways or bull market then it is critical to do not try to enter SHORT trade in such stock. It is much more wise to prepare aggressive long (buy) trade setup in such stock as it offers best profit opportunity.
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