This Major Data Center Company is on a Bullish Run

Yesterday, we looked at a Daily Price Chart of Redfin Corp., 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 GDS Holdings Ltd. (NASDAQ: GDS).

GDS Holdings Limited, together with its subsidiaries, develops and operates data centers in the People’s Republic of China. The company provides colocation, managed hosting, and managed cloud services, as well as consulting services to the cloud, internet, and banking industries. The company serves cloud service providers, internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations.

Now, below is a Daily Price Chart with a 12/26/9 MACD indicator for GDS Holdings Ltd. The MACD chart is shown below the Daily Price Chart.

The GDS Daily Price Chart below shows that GDS 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 were created to help traders verify the momentum of any given stock’s price. MACD lines 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.

chart

When the 12/26 Day MACD line crosses the 9-Day EMA line, this signals either a ‘buy’ or a ‘sell’. When the 12/26 MACD crosses above the 9-Day EMA, this is a ‘buy’ signal and when the 12/26 MACD crosses below the 9-Day EMA, this is a ‘sell’ signal.

MACD charts also include a histogram bar graph. This portion of the chart helps to indicate when a stock’s momentum is either accelerating or slowing. 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, indicating a widening gap and acceleration for the stock’s momentum. When the histogram’s bars begin to shrink, this indicates a narrowing of the gap between the 12/26 Day MACD and the 9-Day EMA and a slowing of the stock’s momentum.

When the histogram bars begin to shrink, 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, GDS’s share price began to rise.

If you had purchased GDS shares when the MACD ‘buy’ signal occurred for the stock back on June 4, when it was around $60.83, you’d be up 31.9% by now.

Not a bad profit for a three week-long hold of a major data center company.

We will continue to monitor GDS as long as the stock’s momentum continues its bullish run.

Best Regards,

Chuck Hughes
Editor, Chart Of The Day

Chuck Hughes

Written By Chuck Hughes

Before Chuck Hughes won 10 Trading Championships, he was an accomplished Air Force pilot. In fact, he credits his success as a stock and options trader to his disciplined upbringing and career. When he was deciding between a career in the Navy and a career in the Air Force, the Navy told him he’d only have a 33% chance of flying jets. The Air Force gave him 100%. He liked those odds better. 35 years ago, Chuck had a wife, a young daughter, a son on the way, and a huge mortgage to afford. He didn’t want to give up on his lifelong dream and stop flying for a major commercial airline. He knew he needed to supplement his income during the 15 days a month he wasn’t flying. So he used his experience in discipline and math, and his understanding of finance and the stock markets (which he’d always been interested in,) and opened a $4,600 trading account. He made over $460,000 in profits his first two years of trading, and he hasn’t looked back since. When he was diagnosed with Meniere’s disease 15 years later, which commonly leads to vertigo…He knew his career as a pilot wouldn’t last much longer with those odds. But he didn’t have to scurry to find another gig, or panic about how his family would eat… He’d spent the last 15 years perfecting his system and raking in cash. As an options trader, Chuck does not let his emotions get in the way of his trading strategy. He adheres to disciplined and methodical options and stock trades. Because he respects the options game so highly, and understands the true freedom that financial solvency can bring, Chuck was able to design and refine his system and win those 10 Trading Championships. Put simply, Chuck Hughes’ trading strategies work, and in all types of market conditions. They’ve worked throughout the bull, bear, and flat markets America has seen in the last 30 years. Chuck Hughes has spent that time building a reputation as one of the most trustworthy options traders in the industry. His publishing group Legacy Publishing LLC was one of the few trading groups on the planet to have correctly predicted and profited from the 2008 financial crash .As a published author 16 times over, a 10-time Trading Championship winner, and an options-trading teacher for 25 years, he’s learned to trade and teach without an ego.