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home | Prebase Behaviors | Price Thrust Above the 40 Week MA

Price Thrust Above the 40 Week MA

Note:  The historical stock example given below is for EDUCATIONAL USE ONLY.  It is NOT to be used to make buy/sell decisions in today's market.  For more information, please read the HSR Terms of Use.


Following a consolidation period underneath its 40 Week MA, price thrusts higher AND closes above the 40 Week MA on heavy volume

A price thrust (thrusting) occurs when a stock's price range gets stretched out due to excessive demand from institutional investors. 

Thrusting implies that there's competition for a stock because investors have to pay ever-higher prices to establish a position. 

This reaching for price causes the price range to expand. 

Behavior Note:  While it's a positive if there's a period of accumulation preceding this behavior, it's not always seen in stocks thrusting above the 40 Week MA.

What you need to know

  1. A strong thrust AND close above the 40 Week MA suggests that the period of accumulation that came before it (if applicable) may have started a trend change because price is following-through to the upside on expanding range AND volume.
  2. Price thrusts may lead you to new stock ideas because the heavy volume gives you a clue that the market likes something about the stock.

When you see a price thrust higher, you may want to ask yourself, "What does the market know about company xyz that I don't?" 

This is one way that you can use the market to help you find leads for new stock ideas. 

Historical Stock Chart Example:  Apple (AAPL) Week Ending 05/09/03

Click to enlarge

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