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Trending Bar Basics
by kathia

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Edac Technologies Corp (EDAC)





 


The trending characteristics and capabilities of a stock are the most important pieces of information the price graph has to offer.

The green and red bars that trace across the top of the price graph describe the ability of that stock to move in a persistent vertical direction (up or down) over time. A green bar suggests an uptrend (vertical movement up) and a red bar suggests a downtrend (vertical movement down). You want to go long in stocks in which green predominates and avoid or short stocks in which red predominates. If neither color dominates (but rather, a candy cane effect with rapid switching from red to green), that suggests the inability of that stock to make sustained progress in either direction. Unless you are a short-term or day trader, you want to avoid stocks that exhibit this non-trending characteristic.

If you receive an anonymous tip for a stock whose graph is dominated by red bars, you want to hang up the phone. If green dominates, start taking notes!


We have gone to great lengths to map what MACD is saying on top of the price graph in order to provide the clearest, most unbiased assessment of whether a stock trends or does not trend. Trending is the first assessment to make when considering a stock for purchase.

Some stocks trend. Others do not. It is far easier to make money in stocks that trend vs. stocks that do not trend. If a stock trends, the bars will appear above prolonged periods of persistent price action in one direction.

Edac Technologies Corp trends. The bars are fairly well timed.


Next: More on Trending Bars


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