by Shane Ormond
On May 21, 2020
Target reported that online sales on an average day in April exceeded last year’s Cyber-Monday sale, because if you’re not going to buy a Cuisinart Perfectemp 14 Cup Programmable Coffee Maker at the end of the world, when are you gunna buy one?
Yesterday, we looked at a Daily Price Chart of Chipotle Mexican Grill, Inc., noting that the stock had been making a series of higher highs and higher lows.
Today’s Chart of the Day is a Moving Average Convergence/ Divergence (MACD) Chart for Fastly, Inc. (NYSE: FSLY).
Fastly, Inc. operates an edge cloud platform for processing, serving, and securing its customer’s applications. The edge cloud is a category of Infrastructure as a Service that enables developers to build, secure, and deliver digital experiences at the edge of the Internet. It is a programmable platform designed for Web and application delivery. As of December 31, 2019, the company’s edge network spans 68 points-of-presence worldwide.
Now, below is a Daily Price Chart with a 12/26/9 MACD indicator for Fastly, Inc. The MACD chart is shown below the Daily Price Chart.
The FSLY Daily Price Chart below shows that FSLY stock is in a price uptrend as the 12/26 Day MACD line (black line) is above the 9-Day EMA (purple line).
MACD lines help traders verify the momentum of any given stock’s price.
They are plotted by subtracting the longer-term Exponential Moving Average from the shorter-term Exponential Moving Average.
In this example, we are using the most common parameters: the 12-Day Exponential Moving Average and the 26-Day Exponential Moving Average .
When the 12/26 Day MACD line crosses above the 9-Day EMA line, this signals a ‘Buy’.
MACD charts also include a histogram bar graph, which helps to indicate when a stock’s momentum is either accelerating or slowing.
You see, when a crossover initially occurs, the histogram’s bar will be near flat as the two indicator lines have converged.
As the 12/26 MACD and 9-Day EMA lines begin to separate, the bars grow in height. The widening gap indicates acceleration for the stock’s momentum.
When the histogram’s bars begin to shrink, the narrowing of the gap between the 12/26 Day MACD and the 9-Day EMA shows a slowing of the stock’s momentum. This can be a signal that a crossover of the indicator lines could happen soon.
As you can see in the chart above, once the MACD line crossed above the 9-Day EMA, FSLY’s share price began to rise.
If you had purchased FSLY shares when the MACD ‘buy’ signal occurred for the stock back on May 6th, when it was around $23.05, you’d be up 91.97% by now.
Not a bad profit for less than a three week hold of a major technology company.
We will continue to monitor FSLY as long as the stock’s momentum continues its bullish run.
Editor, Chart Of The Day