3 Moving Average Fake-Out Trade Setups On Weeklies

The Moving Average Fake-Out uses three moving averages to confirm established trends and provides a reliable way to join the path of least resistance.

Learn: Moving Average Fake-Out

These three stocks have risen steadily in their weekly charts. The color of the moving averages in the charts below changes according to their slope. The look-back periods are 14, 30, and 50.

1. Moving Average Fake-Out On BAC Weekly

This weekly chart of Bank of America (BAC on NYSE) shows a long opportunity.

1. The three moving averages have positive slope and have shown a nice bull trend.
2. The most recent pullback in the trend is in its second leg down. The bullish reversal bar at the 14-period moving average offers a long setup.
3. Using the last major swing high as a target provides a good reward:risk ratio.

2. Moving Average Fake-Out On CMCSA Weekly

Comcast (CMCSA on NASDAQ) has been in a solid upwards trend.

1. The fast moving average provided good support to price. It is a sign of a strong bullish trend.
2. The later pullbacks were deeper but the bulls were undeterred.
3. The two aggressive bear bars pushed prices down to the 14-period moving average. Is it another a fake-out?

As this setup is on the weekly chart, it is more reliable than the earlier moving average fake-out we pointed out on the CMCSA daily chart.

3. Moving Average Fake-Out On STI Weekly

SunTrust Banks (STI on NYSE) offers another opportunity for bullish investors.

1. Despite some sideways action, the moving averages have held up as support.
2. As price broke above the resistance and continued upwards, the trend gained momentum.
3. The bottom tails of the recent bars at the 14-period moving average are signs of buying.

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