If a growth stock is trading above its 50-day moving average, and the 50-day moving average is trading above the 200-day moving average, I am happy to be long. If the stock is trading at new 52-week highs or all-time highs, that’s even better. If a stock gaps up to new highs after a strong earnings report, that can be a great buy signal. Due to an anomaly called “Post-Earnings-Announcement Drift” (PEAD), a stock that has gapped up like this will have a tendency to continue moving in the same direction for many days or even weeks.
