Entry Tactics

Character Change

My go-to setup for getting into new uptrends early, three pieces of evidence on the weekly chart that tell you the trend has likely changed.

February 22, 2026

A character change is when a stock transitions from a long downtrend into the early stages of a new uptrend. I use weekly charts only for this because they cut through the noise and show the real trend.

There are three pieces of evidence I look for:

APP (AppLovin). All three pieces of a character change on the weekly chart. 1: Huge volume surge with a strong move showing institutional buying. 2: Higher low after a long downtrend. 3: First moving average respect giving a low-risk entry.

Volume Surge

A massive volume spike with a strong price move. This is the institutional footprint, big funds can't buy hundreds of thousands of shares quietly, so when you see the biggest volume in months paired with a real move, that's them taking positions. This is your first piece of evidence.

Higher Low

After a long downtrend, the stock makes a higher low on the weekly chart. This alone isn't enough to act on, but it's your second piece of evidence that sellers might be exhausted and buyers are stepping in at higher prices. Something is changing. These first two can happen in either order, you just want to see both.

New Moving Average Respectoptional

The stock pulls back and holds a key moving average for the first time, usually the 10-week or 30-week, but it can be the 4-week too depending on how early you're catching it. This is optional but it's where the setup gets powerful, because now you have all three pieces of evidence lined up and you can get in with a tight stop just below the moving average. If it doesn't work, you're out with minimal risk. If it does, you're riding a new trend from early on.

Once you have 1 and 2, you have confidence that the birth of a new trend is likely in place. Adding 3 gives you the low-risk entry.

What does it mean to respect a moving average?

A moving average is relevant when you can see it mattered looking left on the chart. In APP's case the 10-week MA was resistance for the entire downtrend, price kept bumping into it from below for months and getting rejected. It wasn't just chopping through it randomly, the 10-week was clearly acting as a ceiling. So when the character change happened and the stock started using that same 10-week as support instead of resistance, that was meaningful. The moving average that had been holding it down was now holding it up. That's what respect looks like, the price pulls back to the line and bounces, where before it would rally into the line and fail. When you see that flip, and the moving average was clearly relevant before, you know it's not random.