Looking for Character Change on Charts

When stocks are downtrending, the idea is to simply follow that trend lower and lower.

But after we begin to see key breakouts, then we want to adjust and look for further bullish signals to confirm the uptrend. That's where we are now on many charts. One stock that certainly looks as bullish as it has at any point in 2022 is Chewy Inc. (CHWY). The downtrend remains in play, as you can see below:

Those peaks all line up beautifully, so the downtrend doesn't officially end until we see a break through that downtrend. But the move through 36-37 was a very bullish start. Gap support and the rising 20-day EMA both coincide in the 31.00-31.50 range and that's a critical short-term level to watch.

What does this mean?

If CHWY can hold that support zone and then clear the downtrend line, then the May bottom is confirmed (in my opinion).

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