To identify the direction of a stock, we use a popular technical indicator called Moving Average. The Simple Moving Average (SMA) is a mean average constructed by summing up a set of closing prices over a specified period and dividing the summation by the period used.  The Moving Average can also act as a support level or resistance level when a stock bounces off from it, which in turns will help you time the turning point of a trending stock.

An uptrending stock can be characterized by a moving average that is sloping upwards. Next, we will lookout for possible buying opportunities at the support level when a stock touched and rebounded from an upward sloping moving average.  As seen from the chart of Noble, it had a correction after hitting a high of $2.03 on 8th October 2010. However on closer inspection, the 50-day moving average is still sloping upwards steadily which indicates that the on-going uptrend is still intact. On 29th October 2010, Noble has staged a rebound from the 50-day moving average and thereafter it has recorded a rally of 19% within two weeks. A similar bullish signal has been detected in Noble on 24th November 2010 and the next potential upside target to watch will be the all-time high level at $2.24. However a violation below the immediate support at $2.07 may negate the bullish tone to see a slide towards the next support at $2.00.