|It is difficult to answer this question if you are merely analyzing price activity for one day. Day traders can take advantage of this type of price action but if you are a position trader or a long-term investor seeking value stocks you can protect your profits.|
|When you detect a breakout the first action should be to insert a 50-day moving average on the price chart. Wait for the following two conditions:|
1. Prices to cross above the 50-day moving average on strong volume.
2. The 50-day moving average should start sloping up.
If these two conditions were met I would confidently enter a long position.
|The last price bar on this chart shows signs of a possible positive price movement in Infospace, Inc. [INSP]. If prices break out above the 50-day moving average (shown in blue) on heavy volume and the moving average slopes upward I would confidently enter a long position.|
|Graphic provided by: Tradecast Securities, Inc..|
|The attached chart of Infospace, Inc. [INSP] is an example of a stock that had a price jump on above average volume. The 50-day moving average has been overlaid on the price chart. At present, prices are below this line and it is still sloping down indicating that a confirmed buy signal has not yet been triggered. However, it is a good stock to add to your watch list.|
|Company:||Technical Analysis of Stocks & Commodities|
|Address:||4757 California Ave SW|
|Seattle, WA 98116|
Traders' Resource Links
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|Professional Traders Starter Kit -- Software|
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