Moving Average Extensions: Momentum or Exhaustion?
When a stock moves well above its short-term moving average, it can mean strong momentum is pushing it higher. But it can also mean the stock has become stretched and might be due for a pullback. The same idea applies when price moves well below its moving averages.
Not every stretch is the same though. What happens next often depends on how far the stock has moved, which moving average it's stretched from, whether it's above or below the average, and how this stock has behaved in similar situations before. Some stretched moves tend to keep going, while others are more likely to reverse.
This tool compares the current stretch to similar situations in the past. It helps you see whether extensions like this have usually continued or reversed, giving you better context than just looking at how far price has moved on its own.
Projects a potential price range over the next 45 days by applying historical forward returns from past similar setups.
Shows how often prices rose or fell after similar setups in the past.
The tool automatically scans the market and highlights stocks with the strongest setups for the day ahead.
A full log of every past day when conditions were similar.
Start the day by checking whether the tool is highlighting any unusual activity in your favorite stocks. This helps you quickly identify which names may be setting up for a potential move.
See how price has historically behaved after similar setups. This gives you a realistic view of what typically happens next instead of relying on guesswork.
Switch to Bar Graph view and set your target price level. The bars show how often similar setups reached that distance by upcoming expirations. Toggle between "By Touch" and "By Close" depending on your strategy.
Review the historical matches before taking a position. Pay attention to how many comparable setups exist and whether they occurred during similar market conditions. This helps you determine how much weight to give the current signal.
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