Skip to main content

The Globe and Mail

Technical analysis: Tracking stocks with rising momentum

Getty Images/iStockphoto

Ron Meisels is director of research and Monica Rizk is the senior technical analyst for Phases & Cycles Inc. (

What are we looking for?

In today's screen we look for stocks that have long-term upside potential. We will look at four technical indicators to select the ones that meet this objective.

Story continues below advertisement

The screen

We limited our pool to the S&P/TSX Top 60 constituents and initially selected only those above their rising 40-week moving averages (40wMAs) since this is the primary tool of technical analysis. We then examined each stock and selected those that are above their 10-week moving averages (10wMAs), have positive moving average convergence-divergence (MCAD) and on balance volume (OBV) indicators.

A moving average is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the same number of time periods. The beginning of an uptrend is signalled when the rising short-term average (10wMA) crosses above the longer-term average (40wMA).

The MACD is a trend-following momentum indicator that shows the relationship between these two moving averages.

OBV is used to detect momentum, as it relates volume to price change. OBV shows whether volume is keeping pace with the rise or decline of the selected security.

What did we find?

We found 22 stocks that are trading above both their 40wMAs and 10wMAs but only 12 that have a positive MACD and OBV. Most of these stocks are in the financial or consumer discretionary sectors. In the adjoining table we summarize our findings.

Story continues below advertisement

Report an error
About the Authors
President of Phases & Cycles Inc.

Ron Meisels, President, Phases & Cycles Inc., has been active as an Analyst since 1971. He was Vice President and Director of Technical Research of Nesbitt Thomson (now BMO Nesbitt Burns) from 1982 to 1990. He was ranked among the top three technical analysts by Canadian Institutions for six consecutive years (Brendan Wood Survey). More

Senior Technical Analyst at Phases & Cycles Inc.

Monica Rizk, Senior Technical Analyst, has a Bachelor's degree in Business Administration and completed the Canadian Securities Institute course. She has been with Phases & Cycles since September 2000 and specializes in the research of Canadian and US stocks using Point & Figure as well as bar chart analysis. More


The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at