Not All Stocks Are Trending Lower

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The S&P 500 is headed for another losing month, but not all stocks are trending lower. Do you know how to find them with TradeStation?

Today we’ll look for a basic technical pattern — one of the zillions of things you can do with our award-winning platform.

The 50-day moving average is one of the most common indicators out there. Simply put, stocks moving higher tend to be above it and bearish stocks tend to be below it. There can obviously be nuances but it’s a basic concept most clients probably know at least in passing.

RadarScreen® showing large S&P 500 members relative to their 50-day moving averages.

This RadarScreen® has a custom indicator showing whether where stocks traded relative to their 50-day moving averages. (It can be changed to any moving average.) I then simply imported the entire S&P 500 by clicking on Data → Add Symbol List → S&P 500 Index.

I then added the “Market Cap” indicator and sorted by that column. It shows that of the 20 biggest companies in the S&P 500, only three closed above their 50-day moving averages yesterday: Johnson & Johnson (JNJ), Verizon Communications (VZ) and Procter & Gamble (PG).

Not only is this trio on the Dow Jones Industrial Average. They’re also exactly the kind of “boring” safety plays that have fared well in this volatile market.

The code used to create this scanner is simple and will be available to viewers of Market Action on Monday. Just IM me with your email address once the session begins. Have a great Thanksgiving everyone!

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David Russell is VP of Content Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.