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Trending Bar Basics by kathia |
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Edac Technologies Corp (EDAC) ![]() ![]() ![]() ![]() |
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! |
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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.
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