Chart of the Day: This Holding Reaches Prime Spot to Add More Shares
A short-term technical tool points to a new opportunity for this Portfolio holding.
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One of the short-term technical tools that we favor is the McGinley Dynamic (MD), examined over 14 periods. It is a bit different than relative strength indicators as the MD adjusts for shifts in market speed. The McGinley Dynamic indicator attempts to solve a problem inherent in moving averages that use fixed time lengths.
The basic problem is that the market, being the great discounting mechanism that it is, reacts to events at a speed that a moving average will not be able to cope with. We won't get into the specifics of the formula, but it is a reliable indicator.
The chart of Waste Management WM shows the stock is once again bouncing off the MD, much like it did twice in November and flirted with for most of the early part of fall. While one indicator does not suffice for a pristine analysis, we should use others to create a narrative for stock moves. The MACD is pointing down here, as is stochastics, money flow and the ADX.
However, these bearish conditions were present the prior few times WM was at the MD line, then bounced sharply. We'll take our cues from historical precedent, Waste Management is in a good spot for you to add more shares.
We like WM here and rate it a two in TheStreet Pro Portfolio.
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At the time of publication, TheStreet Pro Portfolio was long WM.
