Spotting A Technical Change of Character

When looking to swing trade individual stocks coming out of a cyclical bear market, I like to look for stocks that previously were downtrending, but now appear to be reversing that trend.

It also helps to have a stock showing leadership characteristics and one that's being accumulated. Currently, Sea Ltd (SE) fits the bill. SE is a $47 billion online entertainment and e-commerce company headquartered in Singapore. After downtrending for over a year from November 2021 through late 2022, SE has seen a character change on its chart and is now trending higher:

Enter Sea Ltd. (SE):

You can spot a character change in a number of ways. With SE, first note the PPO, which was mired in negative territory for a year. That's changed over the past 3-4 months, where the PPO has now been much more positive, reflecting bullish momentum. The two blue lines point to the price surge higher on massive volume after SE posted EPS of 1.25, when consensus estimates expected a loss of .75. And then check out the AD line, which recently cleared its previous high from February 2022. All of this, in my opinion, suggests that the future direction of SE is much more likely higher. Time will either prove me correct or incorrect.

Happy Trading! Tom Bowley Chief Market Strategist EarningsBeats.com Better Timing. Better Trades.