Sometimes the hardest thing to figure out is when to take a win. A key element of that is looking at the move you are trading and determining if it is done. We spotted a recent move this is a perfect example of this dilemma.
CVS recently built out a double bottom and then bounced up. That means the market felt it had drops as low as it should and the buyers jumped in. It gapped up and then pulled back. Take a look.
At first glance it would seem the rebound was just a bounce and the previous drop will resume. But there are some signs that isn’t the case.
The MACD still has bullish separation which is a sign there is still power to the bounce. Also, there is support at the 10 day moving average. There is no denying that it is a right at a tipping point, but the key sign to sell would be a move below that 10 day moving average.
We’ll add this to the list to watch and keep you updated.
Keep learning and trade wisely,
Market Wealth Daily