On the Outskirts of Town

Former momentum darlings like MBLY and TASR seem to have moved to the outskirts of town since August, as they have become an afterthought to hot money traders obsessing over the likes of ACIA and TWLO instead. 

However, the chart of Taser, below on the daily timeframe, raises an interesting point about where the market is and where we might be going from here. 

As one of our Members noted this morning, TASR is reversing back higher from yesterday's doji reversal off its 200-day simple moving average (yellow line). It is often thought that in uptrends a test by price of the 200-day moving average representing a fairly good long entry point so long as we do not see too much churning  and/or heavy sell volume down here. 200-day moving average tests in uptrends (i.e. when the 200-day is rising and price is still broadly making higher highs and higher lows over a long period of time) are supposed to be rare and opportunistic shakeouts for patient longs to enter. 

And with TASR gapping up this morning, confirming yesterday's reversal for at least a temporary low into next week, it should be a good test of whether the market's bounce has legs beyond today's rally. 

The good news is that we have some tangible information with which to work now--Any longs can trade against the 200-day below a logical stop-loss to define downside, and then let upside take us where it goes.