CMS Energy Corp

For today's chart we've chosen to take a look at CMS Energy Corp (NYSE:CMS) because it has closed below the support of its 50-day moving average. As you can see from the chart below, the 50 DMA (red line) has acted as a very influential barrier and it has been able to prevent the uptrend from reversing several times over the past year. Today's cross below the support is concerning for the bulls and any future closes below the average may be used to suggest that the trend is reversing. It is always a good idea to watch for several closes below a moving average to confirm that the shift in trend is real because falsely identifying a changing trend can be disastrous.

We'd expect the 50-day moving average to now become an area of short-term resistance like it was in May 2006. It will take a couple more days for traders to fully understand if this is a trend reversal or if it is simply an area where the bulls are looking to enter so that they can keep the uptrend alive.