As always remember no investment is made in a vacuum. It is important to know what the overall market is doing before you make a new investment.
We will look at 3 different momentum indicators that can be found on BarChart.
The Value Line Index - an index of 1700 stocks
Is the Index trending above or below it's 20, 50 & 100 Daily Moving Average? - ALL above - Bullish indicator
- 20 DMA ABOVE
- 50 DMA ABOVE
- 100 DMA ABOVE
Overall Market Momentum - Are stocks trading above or below their DMA's? - covers approximately 5840 stocks - The majority are trading above their DMAs - Bullish indicator
- 88% are trading ABOVE their 20 DMA
- 85% are trading ABOVE their 50 DMA
- 91% are trading ABOVE their 100 DMA
What ratio of stocks are hitting new highs than new lows? For all 3 periods there are more new Highs than new Lows - Bullish indicator
- 20 day new high/low 2415/196 = 13 to 1
- 65 day new high/low 1388/95 = 15 to 1
- 100 day new high/low 1344/660 = 2 to 1