Sunday, June 10, 2007

Beautiful Bounce from 50-Day Average

While screening with Stockfetcher, I came across this chart for TRW. It had a nice bounce from its 50-day average, and closed at the high-of-day. The pullback to the 50-day is often reported to be a favorite buy-signal for institutions. This will be interesting to watch to see if it can continue its uptrend after such a long run. One strange statistic about TRW is that the short interest in May was only 600K. I may throw some change at this one as I like trades that have a clear place where the trade fails. For this trade, the lower Bollinger Band (not shown), the 50-day average, and the whole number 38 must hold in order for the trade to not fail.

The filter that found TRW is screening for stocks that closed at the HOD on a 10% volume increase over the previous day. There are a few other stocks this screen returned that look interesting to me. Q, IRIS, TUP, CAR


mdawsz said...

Hey woodshedder smsi is testing the long term trend line, check it out.

Woodshedder said...

Interesting. I haven't followed the company in a month or so. What is really upseting is that big selloff was caused by an analyst downgrade. Nothing more. Scary. I don't know what has transpired since.

Marlyn Trades said...

What I find interesting and strange is that the defense industry pretty much as a whole shows the same pattern - check SAI, LMT, BA, NOC others.

I'm not sure what that means.