Start the conversation
One of my favorite technical tools is the 50-day moving average.
I look at it as an area of support and resistance, and I use its slope as an indication of where a stock is headed.
I also like to look at breakouts above the 50-day as a bullish indicator, as the 50-day typically demonstrates underlying strength that has some staying power and will likely continue at least in the short run.
This morning, I ran a scan for these breakout stocks and came up with a list of big profit opportunities, which I'm going to show you in a mintute.
While this indicator alone is usually sufficient for a bullish play, I naturally like to confirm a stock's profit potential by looking at short interest.
It's an extremely powerful, very accurate technical indicator, and when it serves to confirm a breakout above the 50-day moving average...
...that's when you know you've got the potential for high-profit bottled lightning on your hands...
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.