How to Use Charts to Know When to Take Profits from 2024 Profit Stocks | Wilnesh News
After breaking through the bottom in 2023, several stocks staged unusually strong rallies in 2024. trend. In steep uptrends like theirs, it can be difficult to determine when it’s time to take profits, and we can use charts to help enforce our selling rules. When a trend is steep, using the slope of a short-term moving average (such as the 20-day moving average) can help determine when a significant enough loss of momentum has occurred to warrant reducing exposure. We find that once the 20-day moving average flips over after a sharp move higher, it signals that a correction is underway. The daily charts for PLTR and APP show that they are currently supported by a rising 20-day moving average, which is good for holding existing positions. Once the 20-day EMA flips over, we will view the 50-day EMA and the daily Ichimoku cloud model as initial downside risk indicators for a pullback. Depending on the level of support at the time, investors may want to manage risk. An alternative to the 20-day EMA slope is to look for medium-term overbought “sell” signals to determine when the trend is exhausted. The weekly stochastic oscillator is an effective gauge of overbought and oversold conditions in the medium term. Once the stochastic falls back from overbought territory (below 80%), we would typically expect a few weeks of corrective action in price. PLTR’s stochastic remains well above 80%, while APP’s stochastic is closer to breaking 80%. APP also has an active counter-trend signal from the DeMARK Indicators, which also attempt to show trend exhaustion, so we would be respectful if APP finishes the week (ie, logs a Friday close) with its stochastics below 80% as confirmation of that Signal. —Katie Stockton and Will Tamplin Get free access to Fairlead Strategies research here. 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