📈 Watch These Indicators

These are telling us what's coming.

Simple Moving Averages

I like to use simple moving averages to understand the way that indexes are looking at certain stocks/sectors.

For example, when a stock is below the 55 SMA, it means that bears are in control. In other words, indexes are selling.

When a stock is above its 21 SMA, it is a candidate for a swing trade. Below that, I rarely look for swing trades.

I saw a couple moves today in key stocks related to their moving averages that I thought were pertinent.

AAPL

Today Apple stock tested its 200 SMA and held. While the stock doesn’t necessarily look attractive for a swing trade at the moment, this provided me with the tools I needed to successfully day trade it.

When we undercut the 200 SMA and then rebounded back above, it gave us a signal that we were going to hold the level. You often see key moving averages turn into support/resistance.

This helped me day trade AAPL on the long side.

MSFT

Additionally, look at Microsoft’s action today. We pushed above both the 55 and 21 SMAs.

If we can get confirmation of a move higher, this stock can continue to move.

This is one I am keeping on watch as this is now a signal that there may be an opportunity for a swing trade.

I walk through other stocks I am watching in the video below: