MA50

[knotthead]

Hi Dr. Pennystock.

After doing some research and T/A reading (to get a better feel for Technical Analysis), I am learning to read charts a lot better (also thanks to you and other posters on this site). One thing I noticed on some of the forecasts is the mention of the MA50 and the alert that if a stock crosses the MA50 it can be a great sign. I have been watching a handful of stocks that I purchased a while back and have averaged down a bit (as I learn the ropes of TA and chart analysis). One thing I noticed this evening looking at several charts is that a few of the stocks I have been watching recently crossed over the MA50 only to then dive below soon after. It probably didn't help that in several cases the MACD was very high. The charts I am looking at are:  ABR, ACAS

Is there a T/A alert that I am missing? ABR not only broke the MA50 but it also peeked above the upper BB. There is a hanging man before the downturn, but I was thinking that maybe we had a breakout. Like in the case of ABR, ACAS broke out above the upper BB and also peeked above the MA50. I do see the Harami just before the downturn, but again, why did the price then turn after it peeked above those indicators? False breakout?

Thanks for any insight! I am learning slowly and thanks to you and your site I am making better educated trades.

knotthead

[Dr PennyStock]

Knotthead,

Just the fact that a stock passed the MA50 is not guarantee that it will stay above it, in the case of ABR, the stock is in accumulation and that was just a little more buy pressure, in the case of ACAS, it was a rebound due to oversold situation, but, after cross the MA50, the stock had several indicators in overbought level, ADX and RSI, and the price needs to correct, it was just profit taking.

T/A is simple, but, at the same time a little complicated because you need to use several indicators, not just one.