Stocks in a New Uptrend – Performance of the ADX Scan One Week Later
We ran an ADX “Stocks in a New Uptrend” scan on Thursday 09/06/18. Results have been exceptional. We talked about several of these during the daily LIVESTREAM broadcast over the past few days.
Note AMD was on the ADX scan 3 weeks ago. Look how that worked out, (+62.72%) in less than 3 weeks!
Treehouse Foods (THS) broke out on Friday. That was our first opportunity using the scan results Thursday night.
Money flow (CMF/OBV) and MACD are bullish. Look for a followthrough (F/T) if day trading this candidate.
CLDR – ADX
Cloudera, Inc. is a US-based software company that provides a platform for data engineering, data warehousing, machine learning and analytics that runs in the cloud or on premises.
ADX Line Crosses 20
We took a trade on CLDR as ADX line was climbing fast. The stock received two upgrades this week, with targets of 22 and 24. This is a swing for now.
Note the last time ADX ramped upward the stock ran for 8 weeks. We anticipate similar results if the indices remain strong and technology stocks hold their recent breakouts.
The Average Directional Index (ADX) is used to measure the strength or weakness of a trend, not the actual direction. Directional movement is defined by +DI and -DI. In general, the bulls have the edge when +DI is greater than -DI, while the bears have the edge when -DI is greater. Crosses of these directional indicators can be combined with ADX for a complete trading system. – Source Stockcharts.com
At its most basic, the Average Directional Index (ADX) can be used to determine if a security is trending or not. This determination helps traders choose between a trend-following system or a non-trend-following system. Wilder suggests that a strong trend is present when ADX is above 25 and no trend is present when below 20. There appears to be a gray zone between 20 and 25. As noted above, chartists may need to adjust the settings to increase sensitivity and signals. ADX also has a fair amount of lag because of all the smoothing techniques. Many technical analysts use 20 as the key level for ADX. – Source Stockcharts.com
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