From a short- to intermediate-term trading perspective, slowing momentum to the upside is a warning sign if you're long. Slowing momentum can come in different forms, but I consider negative divergences on the MACD and weak volume on price breakouts to be two solid examples. Based on these two criteria, Black Hills Corp (BKH) is a stock to be concerned about if you own it. To illustrate, here's the chart:
The higher price with the lower MACD reading is a negative divergence and an indication of slowing momentum. Note also that I've marked the lighter volume on the most recent price breakouts, another warning sign. Finally, at the bottom of the chart, I've shown that the slope has moved lower (red arrow) despite further upside price action. The slope is still positive, but the recent decline is a sign of trend deterioration and that, combined with the other two warning signs, tells me to sell the stock. These signals don't guarantee a decline, they just suggest that further reward doesn't justify the increasing risk.
Happy trading!
Tom
