Don't Ignore This Chart!

Envelope Surges Show Strength

 | 

The chart below shows DIA with a 20-day SMA and an envelope set 4% above/below the 20-day SMA. Notice how the January plunge below the lower envelope triggered an extended decline. Conversely, the March surge above the upper envelope kicked off the current rally. Not all signals are this clean though. There will be whipsaws.

090817diamova
Click on this chart to see more details.

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus