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 PayPal Holding, Inc., noting that the stock has 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 Arcturus Therapeutics Ltd. (NYSE: ARCT).
Arcturus Therapeutics Holdings Inc., an RNA medicines company, focuses on the treatment of liver and respiratory care diseases. The company engages in the discovery and development of RNA medicines, including the production of RNA drug substance and nanoparticle-formulated drug product; and development of infectious disease vaccines using its Self-Transcribing and Replicating RNA (STARR) technology.
Now, below, the MACD Chart is shown below the Daily Price Chart.
The ARCT Daily Price chart below shows that ARCT 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 26-Day Exponential Moving Average and the 12-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, ARCT’s share price began to rise.
If you had purchased ARCT shares when the MACD ‘buy’ signal occurred for the stock back on April 8th, when it was around $13.76, you’d be up 173.04% by now.
Not a bad profit for a month-long hold of a major Biotechnology company!
We will continue to monitor ARCT as long as the stock’s momentum continues its bullish run.
Editor, Chart Of The Day