Find leaders and bullish signals on price charts | chart of art
Chartists can increase their odds by focusing on stocks that are in a long-term upward trend and show upside leadership. This is similar to the dual momentum approach we covered last week. In today’s example, we use the 40-week SMA to define the trend and check the 52-week highs to confirm a classic bullish continuation pattern for bullish leadership and timing.
The chart below shows weekly candlesticks with the 40-week SMA (red line). First of all, IDXX is in a long-term uptrend as its 200-day SMA is well above its corresponding 40-week SMA. This stock is also showing leadership as it is trading close to its 52-week high. The red dotted line represents the January 2022 high, which IDXX surpassed this level three weeks ago. The stock price showed strong performance last week, reaching a new 52-week high. This first step, uptrend and leadership, is how we approach trading at TrendInvestorPro.
The occurrence of IDXX this month established a bullish continuation pattern over the past seven months. The blue line marks the cup-with-handle pattern popularized by IBD’s William O’Neil. Cup formed in the second half of 2022 and Handle formed in 2024. This is a handle that was consolidated after a rapid rise from early November to mid-December. Rim resistance is set using the pattern high (red line). IDXX broke out of this pattern with a surge three weeks ago and is back up again with a nice rally last week. This breakout signals the continuation of the larger upward trend. I will re-evaluate if it closes below the 200-day SMA.
The indicator window displays the MA Exceeds Percentage (1,40,1), which measures the percentage difference between the closing price and the 40-week SMA. For reference, IDXX is currently 16.42% above its 40-week SMA. This indicator is part of the TrendInvestorPro Indicator Edge plugin for StockCharts ACP.
Chart Trader reports and videos focus on leading stocks and ETFs that are trending upward. Each week we cover the overall market landscape and introduce highly curated trading ideas. This week we’ve covered the Biotech ETF (IBB), L3Harris (LHX), Teledyne (TDY), Bank ETF (KBWB), and Robotics ETF (ROBO). Click here to learn more and get instant access.
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CMT Arthur Hill is the Chief Technology Strategist at TrendInvestorPro.com. Focusing primarily on U.S. stocks and ETFs, his systematic approach to identifying trends, finding signals within trends and establishing key price levels has made him a respected market technician. Arthur has written articles for numerous financial publications, including: Barons and Stocks and Commodities Magazine. In addition to his Chartered Market Technician (CMT) qualification, he holds an MBA from Cass Business School, City University of London. Learn more
