WhiteWave Foods (WWAV), an Action Alerts PLUS holding, bucked the broader-market trend yesterday and finished higher after bouncing off its 50-day moving average.
This is the third time since May that it has successfully tested this key average and each time in the past it followed it up by making a new high. The tests can be seen on the daily chart in May and again in June, with the stock continuing higher and then taking out the previous months high. If the past price action continues, this last test should see follow-up strength and a move above the $51 level in a continuing process of higher highs and higher lows.
This is the healthiest kind of price movement for a stock and suggests further continuation of the uptrend. The relative strength index continues to track above its centerline, reflecting the measured, but steady, positive price momentum and Chaikin money flow and its 21-period signal average have moved back above their centerline suggesting renewed buying interest in the stock.
In the past, these 50-day bounce moves have been profitable entry points and the assumption is that this current one will be another opportunity to enter or add to a position. The-50 day moving average, of course, offers a good measure from which to position a trailing percentage stop.