Signs a Stock Will Go Up – 5 Indicators I Trust

I’ve been trading stocks for over a decade, and if there’s one thing I’ve learned, it’s that no single signal guarantees a stock will go up. But combine a few reliable indicators, and you stack the odds in your favor. In this post, I’ll walk you through the five signs I personally watch before buying a stock. Some are well‑known, but I’ll also point out the subtle traps most beginners miss.

Volume Confirms the Move – Don’t Trust a Quiet Rally

Price going up on low volume? That’s a red flag in disguise. I remember buying a stock that had rallied three days straight on barely any trading volume. I thought I was smart, catching the early move. Next day the price collapsed, and I was stuck. Now I check volume like it’s my morning coffee: essential.

Here’s the trick: look for volume that is at least 50% above the 20‑day average on the breakout day. If you see a price spike but volume is flat, it’s often a trap. Institutions aren’t buying – it’s just a few retail traders pushing it up. Real bulls are packed with volume.

Breakout Above Resistance – But Only If It Holds

A breakout above a resistance level (like a previous high or a trendline) is a classic bullish sign. But here’s the non‑consensus part: a breakout that closes above resistance is not enough. I’ve seen countless stocks break out intraday only to close back inside the range – that’s a fakeout.

What I do: I wait for a confirmed close above resistance on above‑average volume. Then I look for a retest – when the price pulls back to the former resistance level (now support) and bounces. That retest is my entry point. Why? Because it shows the market is validating the breakout.

Insider Buying – When Executives Put Their Money Where Their Mouth Is

Insiders – CEOs, CFOs, directors – know their company better than anyone. When they buy shares in the open market (not options), that’s a powerful signal. But not all insider buying is equal. I filter for:

• Open‑market purchases (not option exercises – those are often just compensation).
• Multiple insiders buying within a short period (1–2 weeks).
• Large dollar amounts relative to their salary (I look for > $100k or > 10% of annual pay).

I use the SEC EDGAR database or sites like OpenInsider. A real story: In 2023, I spotted a biotech stock where three VPs bought a total of $2 million in two days. The stock was beat down. I bought along with them. Six months later, the stock had doubled after positive trial results. Was it luck? Partly, but the insider buying was the clue that tipped the odds.

Be careful: insider selling can be for many reasons (buying a house, diversification). But insider buying is almost always bullish.

Fundamental Catalysts – Earnings, Guidance, and Sector Tailwinds

Signs that a stock will go up aren’t just about price patterns. Fundamentals matter, and I look for three specific catalysts:

Accelerating Earnings Growth

A stock that has beaten earnings estimates for the last 2–3 quarters and raised guidance is a bullish beast. I check the “earnings surprise” column on Yahoo Finance. If a company consistently beats by 5% or more, it’s a sign of momentum.

New Product/Service Cycle

Think Apple before an iPhone launch, or Tesla before a new model. Companies entering a big product cycle often see a sustained run. I read annual reports and listen to earnings calls for phrases like “launching in Q3” or “record pipeline”.

Industry Group Strength

I never buy a stock in a weak sector. If the industry group is one of the top 10% (I use Investor’s Business Daily’s group rankings), the stock has a tailwind. For example, during the 2020–2021 tech boom, pretty much any semiconductor stock went up because the sector was hot.

I combine these with price action: if a stock has strong fundamentals but the price is falling, I wait. Eventually the market catches up.

Technical Oscillators – RSI & MACD in the Sweet Spot

Finally, I glance at a couple of oscillators to fine‑tune timing. Not as standalone signals – more as confirmation.

But here’s the catch: I never buy just because RSI is low. “Oversold” can stay oversold for weeks in a downtrend. I wait for the move back above 40 – that’s the sign that the selling has exhausted and buyers are stepping in.

For MACD, I want to see the histogram turn positive and the lines cross above zero for extra confirmation.

FAQ – Common Questions About Bullish Signals

*This article reflects my personal trading experience and is for educational purposes only. Always do your own research.