Momentum Stocks Analysis & Momentum Trading Signals
The Moving Average Envelopes indicator creates two lines around the stocks price forming a channel. The upper and lower channel lines are drawn at an equidistant level above and below the Moving Average. The distance to draw the envelopes is calculated using a percent or a number of pips.
MA Envelope
Stock Technical Analysis and Generating Stocks Signals
MA Envelope can be traded using several different trading rules. Main technique of generating stock trading signals is to use the stocks price penetrating the upper channel or lower channel.
Bullish Trading Signal
Stocks Price penetrating the upper channel is a long buy stocks trade signal.
Buy Stock Signal
Bearish Trading Signal
Stocks Price penetrating the lower channel is a short sell stocks trade signal.
Sell Stock Signal
In a trending market the Moving Average points upward in an up stocks trend market or downward in a down stock trending market. It is good to use the envelopes together with other indicators such as stocks trendlines so as to confirm the trading signals generated.