Hey Traders,
Friday I gave you a pop quiz.
I wanted you to test yourself and see how your trend spotting skills are.
If you missed it, check out the original post here before reading the answers.
Quiz Answers
Here are the 10 tickers I gave you, along with my explanation of what I see in the charts.
Remember, the 3 possible answers are bullish, bearish or no man’s land.
- CNM – BULLISH – This stock is in a great trend. Like many stocks, it had a slight retrace in April, but it quickly bounced back.
- ZS – BEARISH – The stock was in a great trend up until mid-February, then it fell really hard, really fast. Right now, the price is below all 3 trend lines and those are going to serve as resistance to the stock coming back up.
- AKAM – BEARISH – Another bearish one. Similar to ZS, this was in a great trend, but it fell hard and fast. Now those 3 trend points above the price are going to serve as resistance. This might be a good short.
- AAPL – NO MAN’S LAND – Apple went full on bearish in early March with the green short term trend line dropping below the red long term trend line. And even though it bounced on earnings, the trend tells us this is not a stock we want to touch right now.
Remember, when we use trends, we’re not trying to pick bottoms. We’re looking for a strong trend so we can “jump on an already-moving train”, as I like to say.
- FTAI – BULLISH – This is such a beautiful trend. Even during April’s market volatility, this stock didn’t have any trouble at all. It never closed below the short-term trend line. I feel like this is one stock that has flown below the radar for a lot of traders.
- MAR – NO MAN’S LAND – This was in a good trend until mid-April and then BOOM, it just fell. Right now it’s below 2 trend lines and above the long term trendline. So this is not something you want to touch. There’s no high-probability move for us to tap into right now.
- PGR – BULLISH – This is an interesting example. Technically it’s still bullish. But if you notice, in the last 4 weeks, it’s started poking down below its short term trend line a couple of times. This one might be getting ready to roll over.
Again, the right answer is that it’s technically bullish, but with so many other good opportunities out there, I would be careful with this one.
- TSLA – NO MAN’S LAND – This one is just like AAPL that we discussed above. It was in a bearish trend until earnings, and then it popped. There’s no firm trend here, I would stay away from it.
- DELL – BULLISH – Technically bullish, but it looks liek it might be having some trouble. Just like PGR, it’s been poking down through its short-term trendline. While this is technically bullish, I would be cafreful.
- META – NO MAN’S LAND – The stock price is down below 2 trend lines and up above the long term trend. The interesting thing about this one is that it gapped up on its January earnings report.
Whenever I see a gap like that, I know it will need to “fill in that gap” in the future. And that’s what it’s doing right now. If you look on your chart, you’ll see that the stock is trading right in that price range that it “gapped” over back in January.
How did you do? Did you get them all right?
Don’t worry, there were a few tough ones in there. The best thing you can do is practice. Keep those indicators on your charts and always look at stocks in a 6 month view.
This will help you develop an eye for the patterns I look for in stocks.
And stay tuned, I’ll do some more of these in the future so you can keep your skills sharp.
Trade well,
Jack Carter
