{"id":9174,"date":"2021-10-06T20:41:10","date_gmt":"2021-10-07T00:41:10","guid":{"rendered":"https:\/\/morpheustrading.com\/blog\/?p=9174"},"modified":"2023-01-24T11:38:23","modified_gmt":"2023-01-24T16:38:23","slug":"10-week-ma-pullback-entry","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/10-week-ma-pullback-entry\/","title":{"rendered":"How to Score Big Gains Buying Top Stocks on a Pullback to the 10-week MA"},"content":{"rendered":"<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006SPT1.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006SPT1.png\" alt=\"\" width=\"728\" height=\"644\" title=\"\"><\/a><\/figure>\n<\/div>\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/10-week-ma-pullback-entry\/#When_the_market_enters_correction_mode_leading_stocks_often_provide_low-risk_buy_entries_as_they_pull_back_to_key_support_of_their_10-week_moving_averages_Heres_how_to_profit_from_applying_this_simple_trading_strategy_to_top_stocks_on_a_pullback_now\" >When the market enters correction mode, leading stocks often provide low-risk buy entries as they pull back to key support of their 10-week moving averages. Here&#8217;s how to profit from applying this simple trading strategy to top stocks on a pullback now.<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/10-week-ma-pullback-entry\/#Why_the_10-week_MA_matters_so_much\" >Why the 10-week MA matters so much<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/10-week-ma-pullback-entry\/#What_to_look_for_when_buying_a_pullback_to_the_10-week_MA\" >What to look for when buying a pullback to the 10-week MA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/10-week-ma-pullback-entry\/#Chart_walk-throughs_Putting_it_all_together\" >Chart walk-throughs: Putting it all together<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/morpheustrading.com\/blog\/10-week-ma-pullback-entry\/#Sprout_Social_SPT\" >Sprout Social ($SPT)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/morpheustrading.com\/blog\/10-week-ma-pullback-entry\/#Nvidia_NVDA\" >Nvidia ($NVDA)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/morpheustrading.com\/blog\/10-week-ma-pullback-entry\/#4-step_checklist_for_buying_top_stocks_pulling_back_to_their_10-week_MAs\" >4-step checklist for buying top stocks pulling back to their 10-week MAs<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_the_market_enters_correction_mode_leading_stocks_often_provide_low-risk_buy_entries_as_they_pull_back_to_key_support_of_their_10-week_moving_averages_Heres_how_to_profit_from_applying_this_simple_trading_strategy_to_top_stocks_on_a_pullback_now\"><\/span>When the market enters correction mode, leading stocks often provide low-risk buy entries as they pull back to key support of their 10-week moving averages. Here&#8217;s how to profit from applying this simple trading strategy to top stocks on a pullback now.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>With both the NASDAQ and S&amp;P 500 recently breaking below support of their year-long uptrends, most stocks in the market are now well off their highs.<\/p>\n\n\n\n<p>Many under-performing stocks now have badly damaged chart patterns that will take a long time (if ever) to revert to a bullish trend again.<\/p>\n\n\n\n<p>However, select leading growth stocks with relative strength are still holding above key support levels that could enable them to ascend to new market leadership when the bulls return.<\/p>\n\n\n\n<p>One simple way to find the next potential big winners is to buy strong stocks that are now pulling back to their <a href=\"https:\/\/www.investors.com\/how-to-invest\/investors-corner\/how-to-buy-stocks-why-the-10-week-moving-average-offers-new-entry-points\/\" target=\"_blank\" rel=\"noopener\">10-week moving averages<\/a>.<\/p>\n\n\n\n<p><em>Continue reading<\/em> to discover how to pump up your portfolio from applying this basic trading strategy to the current market.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_the_10-week_MA_matters_so_much\"><\/span>Why the 10-week MA matters so much<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Most of the stocks we buy in <em><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\">The Wagner Daily<\/a><\/em> model portfolio are breakouts from a solid base of consolidation.<\/p>\n\n\n\n<p>However, we also score big gains from buying pullbacks of explosive growth stocks pulling back into key support of their 10-week moving averages (10-week MA).<\/p>\n\n\n\n<p>Mutual funds, hedge funds, and other institutions often buy hot stocks when they retrace to their 10-week MAs&#8211;a closely-watched indicator of intermediate-term trend.<\/p>\n\n\n\n<p>Following institutional money flow into leading stocks is always a great way to put the wind on your back.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_to_look_for_when_buying_a_pullback_to_the_10-week_MA\"><\/span>What to look for when buying a pullback to the 10-week MA<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Whenever a stock breaks out from a solid basing pattern and goes into trend mode, we then monitor for pullback entries using moving averages on the daily and weekly timeframes. <\/p>\n\n\n\n<p>As short to intermediate-term swing traders, most of our pullback entries into leading stocks is on pullbacks to the shorter-term 10 and 20-day moving averages. <\/p>\n\n\n\n<p>However, we also look for pullbacks to the 10-week MA on the weekly chart.<\/p>\n\n\n\n<p>This type of pullback does not occur as frequently as a pullback to the 10 or 20-day MA, but it is a <strong>highly reliable buy signal that often offers a lower-risk entry point.<\/strong><\/p>\n\n\n\n<p>Below are a few examples of what to look for when buying a pullback to the 10-week SMA.   <\/p>\n\n\n\n<p>First, we look for a strong breakout from a <a href=\"https:\/\/new.morpheustrading.com\/blog\/best-stock-breakouts\/\" target=\"_blank\" rel=\"noreferrer noopener\">valid basing pattern<\/a>.  <\/p>\n\n\n\n<p>The breakout (before the pullback) should be a move to new 52-week highs, and confirmed by increasing volume. <\/p>\n\n\n\n<p>Look for stocks that may have recently touched the 200-day moving average, or have come close to touching the 200-day MA during the base that preceded the breakout. <\/p>\n\n\n\n<p>This helps identify candidates that are not too extended and have room to run.<\/p>\n\n\n\n<p>In stocks that are extended 20%-30% or more above the breakout level, <strong>look for pullbacks to the rising 10-week MAs that do not touch the 50-day MAs<\/strong> on the daily chart.  <\/p>\n\n\n\n<p>This occurs quite often.  <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Chart_walk-throughs_Putting_it_all_together\"><\/span>Chart walk-throughs: Putting it all together <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Let&#8217;s walk through the charts of a few examples to show you exactly how it works.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sprout_Social_SPT\"><\/span>Sprout Social ($SPT)<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Recently, Sprout Social ($SPT) enjoyed a strong breakout on high volume from a lengthy base.<\/p>\n\n\n\n<p>As we look for, this was followed by a pullback to the rising 10-week MA.  <\/p>\n\n\n\n<p>The breakout and subsequent pullback to the 10-week MA is shown on the weekly chart of $SPT below:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006SPT2.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006SPT2.png\" alt=\"\" width=\"728\" height=\"644\" title=\"\"><\/a><figcaption class=\"wp-element-caption\"><em>Press to view full-sized image<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<p><iframe loading=\"lazy\" width=\"580\" height=\"680\" src=\"https:\/\/4966a6ff.sibforms.com\/serve\/MUIFAOyl4S5Qdajs7q3LemJKudDbMHB24p2SAorKuWWuauy3e1eFPtLgTh5BoPCh3XzIz3rZE_YyIqvc9IEl_xMkRg3MTlG0Zn5eqY3J2eKMjOE-jPuS43ZXewKssUaGt1kllR56wV2u1lBXoYfKSzEgeeTjLyjdSao87VmqsbDtgcy4jNwHMSzf0Rl346rIoBjtZwf-DX0V6tbn\" frameborder=\"0\" scrolling=\"auto\" allowfullscreen style=\"display: block;margin-left: auto;margin-right: auto;max-width: 100%;\"><\/iframe><\/p>\n\n\n\n<p><strong>When you first spot a stock that has retraced to its 10-week MA, it is a signal to begin looking for an entry on the daily chart timeframe<\/strong>.<\/p>\n\n\n\n<p>We typically look for the confirmation of a short-term bottom by waiting for a bullish reversal candle (such as a <a href=\"https:\/\/ninjatrader.com\/blog\/what-is-a-hammer-candlestick-chart-pattern\/\" target=\"_blank\" rel=\"noreferrer noopener\">hammer<\/a>). <\/p>\n\n\n\n<p>Drilling down to the shorter-term daily chart below, notice how <strong>$SPT stopped just shy of its 50-day MA and closed with a bullish reversal candle<\/strong>:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006SPT1.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006SPT1.png\" alt=\"\" width=\"728\" height=\"644\" title=\"\"><\/a><figcaption class=\"wp-element-caption\"><em>Press to view full-sized image<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<p>When you see this type of reversal bar on the daily chart, one possible swing entry is waiting for the price to move above the high of the reversal candle.  <\/p>\n\n\n\n<p>Once triggered, the price should not come back down beneath the low of the reversal candle, which is an ideal level to place your protective stop.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Nvidia_NVDA\"><\/span>Nvidia ($NVDA)<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The weekly chart of leading tech company Nvidia shows a strong breakout on volume from a lengthy <a href=\"https:\/\/www.investors.com\/how-to-invest\/investors-corner\/five-ways-to-spot-the-bullish-base-on-base-stock-pattern\/\" target=\"_blank\" rel=\"noreferrer noopener\">base on base<\/a> type pattern, followed by a pullback to the rising 10-week MA.  <\/p>\n\n\n\n<p>Again, the <strong>first touch of the 10-week MA is a signal to begin looking for some sort of entry<\/strong> on the daily chart. <\/p>\n\n\n\n<p>The pullback to the 10-week MA is shown on the weekly chart of $NVDA below:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006NVDA2.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006NVDA2.png\" alt=\"\" width=\"728\" height=\"644\" title=\"\"><\/a><figcaption class=\"wp-element-caption\"><em>Press to view full-sized image<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<p>Like $STP, the pullback in $NVDA stopped just shy of the 50-day moving average on the daily chart and formed a bullish reversal candle:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006NVDA1.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/211006NVDA1.png\" alt=\"\" width=\"728\" height=\"644\" title=\"\"><\/a><figcaption class=\"wp-element-caption\"><em>Press to view full-sized image<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<p>On this chart, a potential entry trigger could be a rally above the July 19 high, which triggered two days later.<\/p>\n\n\n\n<p>Again, a protective stop can be neatly placed beneath the low of the reversal candle.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4-step_checklist_for_buying_top_stocks_pulling_back_to_their_10-week_MAs\"><\/span>4-step checklist for buying top stocks pulling back to their 10-week MAs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The pullback to the 10-week moving average is often a fantastic, low-risk entry to climb aboard a leading stock in a strong uptrend.  <\/p>\n\n\n\n<p>Here is a simple, <strong>4-step summary checklist<\/strong> to help you find top stocks pulling back to their 10-week MAs:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Stock breaks out from a valid basing pattern <em>on higher volume<\/em> and rallies to a new 52-week high.<\/li>\n\n\n\n<li>Stock pulls back to touch support of the 10-week MA and ideally just missed the 50-day MA.<\/li>\n\n\n\n<li>Wait for bullish reversal pattern on daily chart, then buy above high of the reversal bar.<\/li>\n\n\n\n<li>Set protective stop below the low of the reversal bar.<\/li>\n<\/ol>\n\n\n\n<p>Of course, not all pullback entries will quickly rally back to new highs within a week or two&#8211;like $SPT did. <\/p>\n\n\n\n<p>Some stocks, such as our $NVDA example, may need a bit more time before moving out. <\/p>\n\n\n\n<p>Regardless, these pullback entries are pretty low-risk and tend to hold up well.  <\/p>\n\n\n\n<p><em><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Subscribe now<\/strong><\/a> to The Wagner Daily to be instantly alerted to the next hot stock we buy on a pullback to the 10-week MA (and many other explosive swing trade setups).<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When the market enters correction mode, leading stocks often provide low-risk buy entries as they pull back to key support of their 10-week moving averages. Here&#8217;s how to profit from applying this simple trading strategy to top stocks on a pullback now. With both the NASDAQ and S&amp;P 500 recently breaking below support of their [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-9174","post","type-post","status-publish","format-standard","hentry","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/9174","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=9174"}],"version-history":[{"count":5,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/9174\/revisions"}],"predecessor-version":[{"id":15690,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/9174\/revisions\/15690"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=9174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=9174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=9174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}