Wednesday, December 9, 2009

Guppy Charts: Leading and Lagging All Time High Stocks and the Indexes

Guppy Multiple Moving Average (aka Guppy MMA, or GMMA) charts help visualize the short and long-term trend for a stock or stock market. Let's take a look at some Guppy charts for the best and worst performing stocks from yesterday's all-time high performance recap and for the broad market indexes. After last week's post a reader asked where I get these charts; the answer is that I make them myself using scripts I wrote in MATLAB.

Best performing stocks. These three charts show patterns that we want to see. Note how the short-term moving averages (red) stayed above the longer averages (black) over the past 6 weeks. NEU and AMZN have held up well during the recent selling. FIRE has also been resilient, getting support just below EMA(60) over the past couple months. It would be healthy to see FIRE break above its October highs soon.







Worst performing stock. After more than tripling in price between March and October EBIX finally showed weakness and, unlike previous pullbacks, this time it pierced the long-term averages. Note how the short-term moving averages (red) dipped below the longer averages (black) in November. Looks like it got support around the September highs. The averages are now compressed, suggesting there isn't a clear directional trend (other than sideways).



US Stock Market Indexes. Despite the recent selling pressure, the uptrends are in tact for SPY and QQQQ. The small caps (IWM) popped up and are now also in an uptrend (Trader Mike has more discussion on this).







Canadian and Chinese Stock Market Indexes. Both Canadian (EWC) and Chinese (FXI) indexes are testing their long-term EMAs. It is concerning that EWC did not move break above its October highs before this pullback. I will be keeping a close eye on these indexes.





Gold. GLD sold off hard late last week and into this week. This is a nice example of how the expanding moving averages (by 'expanding' I mean that the averages are spreading apart) can indicate a good time to take profits or exercise caution before entering a position. Expanding moving averages are a sign that a trade is getting crowded as more and more people pile on. Harsh pullbacks should be expected (although they may not occur for months... see the recent action in AMZN). All that aside, the uptrend in GLD remains, although the short EMAs are poised to test the long-term averages.


All charts were made using closing prices, adjusted for splits and dividends, from Yahoo Finance.

Related Post: Last Week's Guppy Charts

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