In yesterday's extension of the current rally, three more Dow stocks crossed above their 200-day moving averages. There are now seven stocks on the Dow above this technical threshold.
On a basic level, technicians use simple moving averages to visualize market trends. When a stock crosses above or below a moving average it can be a trading signal - above is bullish while below is bearish. A breakthrough above an upward sloping trend line is even more bullish.
Yesterday, The Walt Disney Company , 3M and United Technologies crossed above their long-term trend lines. As you can see from the charts below, their trend lines are still downward sloping so proceed with caution. Disney's chart looks the best of the three, as it also broke through its year end resistance levels and is close to levels it has not seen since the start of November.