Moving Averages for ASX Momentum Stocks: How Gary Glover Identifies Leaders, Times Entries with Light Volume Pullbacks, and Stays in Winning Trades
- Christopher Hall
- May 29
- 15 min read
Written by Christopher Hall, AdvDipFP | Authorised Representative, AFSL 526688 | Updated May 2026. Analysis sourced from Gary Glover (AR 259215), Authorised Representative, Novus Capital Limited (AFSL 238 168)
The 10-day and 20-day exponential moving averages (EMAs) are the primary tools ASX momentum traders use to identify the strongest stocks, time precision entries through light volume pullbacks, and stay in winning positions as long as the trend remains intact — without guessing when to exit.
Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168), who reviews ASX momentum stocks in a recorded weekly session with Finer Market Points, made moving average management the central theme of his 29 May 2026 session. This guide draws on Gary's practitioner observations to cover the 10/20/50-day MA framework for identifying momentum leaders, how near-zero volume pullbacks signal the precise entry in VCP and cup-and-handle setups, and how to adjust risk parameters when market conditions tighten.
How Do the 10-Day and 20-Day Moving Averages Identify the Strongest ASX Momentum Stocks?
The strongest momentum stocks on the ASX hug the 10-day EMA throughout their move — consistently pulling back toward it but never closing below it — while the next tier of strong performers holds the 20-day EMA. This distinction separates the fastest market leaders from the rest of the momentum univers
Gary Glover's anecdotal observation, developed across his trading career, is that this hierarchy is consistent across market cycles. This is a practitioner observation, not a formal study. "The fastest names, the strongest names — those are what you want to be trading," Gary noted during the 29 May 2026 session. "So the really the ten and the twenty sort of pretty, pretty important."
The three-level framework works as follows. Stocks holding above the 10-day EMA are absorbing every pullback with sustained institutional demand — nothing meaningful is being sold. Stocks holding above the 20-day EMA are still strong but moving at a slightly lower momentum tier, where sellers arrive more frequently but still fail to drive a close below the average. The 50-day MA is the hard floor: as William O'Neil documented in How to Make Money in Stocks (2009), any momentum stock that closes below the 50-day MA is exited — no exceptions.
A key pattern in this framework is the Volatility Contraction Pattern — a chart formation where a stock consolidates with progressively tighter price ranges before breaking out, with each successive pullback smaller than the last, signalling diminishing selling pressure as supply exhausts before a significant upward move. VCP setup identification is the entry signal; the EMA structure is what keeps a trader in after that entry fires.
Gary demonstrated across three stocks in the 29 May 2026 session. 1414 Degrees (ASX: 14D) formed a large VCP with a trigger day on above-average volume, then hugged the 10-day EMA continuously throughout the subsequent move — each pullback touching or approaching the average without closing below it. Jade Gas Holdings (ASX: JGH) offered a smaller-name example: a 3-cent stock that rose to 8 cents while hugging the 10-day EMA throughout, never closing below it despite its relative illiquidity.
Tasmea Limited (ASX: TEA) — Gary's nominated model stock to study from the session — illustrates the 20-day EMA tier. An IPO-type company with strong momentum from its earliest days on market, TEA moved from $3.20 to $7.20 during the trend — more than doubling — while consistently hugging the 20-day EMA throughout. Gary recommended studying TEA across its full trend history as a practical lesson in how the three-average framework applies across different legs of a move.
Remember that past performance is no guarantee of future results, and all trading involves risk.
Examining the 50-day MA entry and exit system alongside these examples shows how the three averages form a complete trailing framework from the fastest-moving leader down to the hard floor.
How Do the Best Traders Use Moving Averages to Stay in Winning Positions?
The best momentum traders use the 10-day and 20-day EMAs as trailing stops — not as fixed exit targets. That distinction is what separates traders generating 20–23% annual returns from those generating 40–100%+ in the same market.
Gary Glover's anecdotal observation, developed across his trading career, is that his earlier 20–23% annual returns came from the 3:1 binary system — taking profit at a fixed multiple, regardless of trend. This reflects Gary Glover's personal trading experience on ASX-listed stocks — individual trading results vary based on approach, risk tolerance, and market conditions. When Gary studied how the best momentum traders actually operated, the difference was clear: they were not exiting at a fixed multiple. They were staying in as long as the MA held.
Gary's anecdotal observation, developed across his trading career, is that the returns he observed in top momentum traders — in the 40–100%+ annual range — come from getting a meaningful position on with tight initial risk, riding a large move, and only exiting a small portion early while letting the rest run with the MA. This is not a formal study; individual results vary.
Mark Minervini's research on the behaviour of historical market leaders provides the structural basis for why this works. In his "Handling Market Corrections" presentation, Minervini stated:
"Some of these stocks go up 400, 500%, some go up 1,000% and never close below the 50-day moving average. The 50-day contains the entire move."— Mark Minervini, "Handling Market Corrections"
Minervini is describing the empirical behaviour of the greatest stock market winners: the 50-day MA is not just a stop-loss level — it is the structural container for the entire advance. For ASX momentum traders, the implication is direct: exiting at a fixed 3:1 target removes a position at an arbitrary price that has nothing to do with whether the trend is intact. The MA tells a trader when the trend is actually ending.
Gary's current approach applies this principle in layers: take some profit at 3× initial risk to de-risk the position, then hold the remainder using the MAs as trailing stops until knocked out. Megaport Limited (ASX: MP1) demonstrated this in the session — a VCP pattern, an initial pop, pullback and consolidation on the 10-day EMA, a second pop — holding the 10-day EMA throughout the sequence.
Moving averages also function as dynamic support and resistance levels. The market tests them because institutional traders use them as reference points, creating self-reinforcing behaviour at those levels. ASX momentum trading data on the 50-day moving average reflects this dynamic at a market-wide level.
Gary also referenced Jeff Sun, a US trader with a strong track record, who applies specific formulas preventing entry when a stock is too extended from its MA — a complementary discipline that addresses the inverse risk: entering a strong position too late, after the stock has already moved far from its natural support level. For deeper context on the SEPA stock selection framework that underpins position management within this approach, the full Minervini methodology addresses entry timing alongside MA structure.
The FMP Momentum Profile — published daily and accessible to FMP YouTube Momentum Profile members — included relative strength rankings and MA positioning data across the ASX at the time of the 29 May 2026 session, giving members early access to the educational data discussed in this article.
What Does a Light Volume Pullback Signal in a VCP or Cup-and-Handle Setup?
In a cup-and-handle or VCP formation, the entry signal is not the breakout itself — it is the quality of the pullback that precedes it. Near-zero volume on days 3 and 4 of the A-B-C handle correction confirms that genuine sellers have exhausted, and the remaining price movement is structural, not supply-driven.
The cup and handle pattern — documented by William O'Neil in How to Make Money in Stocks (2009) — is a price consolidation where a stock forms a rounded bowl-shaped base (the cup), followed by a brief shallow pullback (the handle), before breaking out to new highs. The handle should form in the upper half of the cup and ideally show declining volume during its formation.
Stan Weinstein's stage analysis — as documented in Secrets for Profiting in Bull and Bear Markets (1988) — establishes the volume principle from the other direction: a valid breakout must occur on above-average volume. Gary applied this principle inversely to the handle pullback: if volume is absent during the pullback, it confirms no active sellers are present. The pullback is structural, not distributional.
Gary Glover's anecdotal observation, developed across his trading career, is that the volume dry-up is the specific tell worth waiting for in a cup-and-handle setup — not the breakout trigger day, but the three or four days before it.
The four-step identification process below is drawn from Gary Glover's practitioner approach, developed across his trading career and synthesised from the 29 May 2026 session:
Step 1 — Identify the cup base. A rounded bowl formation holding above the 50-day MA, formed after a prior advance. The right side of the cup should match or approach the left side in price.
Step 2 — Observe the handle pullback. A brief A-B-C correction forms the handle. A is the high of the right side of the cup; B is the low of the pullback; C is the tightening before the breakout trigger. The handle should pull back no more than one-third of the cup's depth.
Step 3 — Confirm volume dries up on day 3–4. Near-zero volume on days 3 and 4 of the handle pullback confirms sellers are absent. Heavy volume during the handle signals distribution — the setup is compromised.
Step 4 — Identify the breakout trigger. The handle resolves back above the highs of the right shoulder of the cup on increasing volume. This is the entry point.
Gary illustrated this with EDU Holdings (ASX: EDU) in the 29 May 2026 session. EDU had shown strong relative strength before forming a cup and handle with a lower handle — technically a weaker variant, but validated entirely by the volume picture. "One, two, three on the fourth day is just no, no volume at all — no selling there," Gary observed. The absence of selling confirmed the setup.
For context on how VCPs and cup-and-handle patterns compare as entry frameworks, both patterns depend on the same underlying principle: supply exhaustion confirmed by volume before a demand-driven move.
What Three Criteria Should Momentum Traders Check Before Entering Any ASX Stock?
Gary applies three non-negotiable criteria simultaneously before entering any momentum stock: relative strength, sector strength, and trend strength — with both the daily and weekly chart in a strong, uniform position. Entering when only one or two criteria align increases the risk of a failed breakout.
William O'Neil's CANSLIM methodology, documented in How to Make Money in Stocks (2009), captures this in the "L" factor: select leaders, not laggards. The three-criteria filter is the practitioner translation of that principle into a daily screening process.
Each criterion serves a distinct function. How to apply relative strength to ASX stocks confirms the individual stock is outperforming the index and its sector — capital is moving toward it, not just carrying it. Sector strength confirms the setup has a broader current behind it, not a lone-wolf move. Trend strength on both daily and weekly charts confirms the structural position is intact across timeframes, not just a surface-level one-day signal.
Gary adds a fourth practical filter: the top-half trading rule. Gary Glover's anecdotal observation, developed across his trading career, is that a momentum trader should only enter positions in stocks in the upper half of their chart range. "If I draw a line through the chart, if it's not in the top half, I shouldn't be trading it," Gary said in the 29 May 2026 session. Stocks below the midpoint have not re-established their trend.
Electro Optic Systems (ASX: EOS) illustrated what happens when criteria are partially met. EOS showed relative strength, and volume confirmed institutional interest on the breakout — an undercut of a prior low followed by a break of the most recent lower high on good volume. Gary had it on his trade list. He chose not to enter.
"My only concern there was the bigger picture — it was going back to retest an old high, and that's a bit of a false break of a really long-term high," Gary noted. "If that wasn't there, I wouldn't have worried about it." The stock ran without him. Gary's reflection: he recognised he was trading around a technical bias, not a fundamental rejection of the setup. The three-criteria filter identifies valid setups; bias management determines whether a trader acts on them.
For a structured pre-entry checklist, the B-wave trade checklist maps Gary's three criteria into a practical screen for difficult market conditions.
How Do Momentum Traders Adjust Their Approach When the Market Gets Harder?
When market momentum deteriorates — breakouts fizzling more frequently, moves running shorter than expected — the correct adjustment is not to abandon the same setups. It is to narrow the parameters. The process stays the same; the goalposts move closer.
Mark Minervini described his risk approach at the Trader Line Conference (2025):
"We're averaging anywhere between if we're really tight you know 3% three and a half 4%. In a market that's not very good we might be five, six percent, averaging four, five, six percent. Line in the sand at 8%."— Mark Minervini, Trader Line Conference (2025)
In the context of the current ASX environment — near all-time highs with momentum breakouts fizzling — Gary Glover's anecdotal observation, developed across his trading career, is that this translates to pulling the acceptable stop risk from around 7% down to 4–5%, while reducing the target from around 20% to 12–15%. "He just sort of moves the goalposts a little bit narrower," Gary noted of Minervini's adjustment. "But the process is still the same."
For traders building toward MA-trailing exits, the 3:1 binary system provides a structured starting point: one unit of account risk per trade, exit at −1 unit if wrong, move to breakeven at +1 unit profit, exit fully at +3 units. Gary Glover's anecdotal observation, developed across his trading career, is that with this system, approximately one-third of trades exit at −1 unit, one-third exit at breakeven, and one-third reach a net average of approximately +2 units — producing a profitable outcome over time. This reflects Gary Glover's personal trading experience — individual outcomes vary based on market conditions, position management, and approach.
Nufarm Limited (ASX: NUF) demonstrated tighter-parameter execution in the current environment. Gary disclosed during the 29 May 2026 session that he held a position in NUF — this disclosure is made in accordance with the Gary Glover Source Disclaimer at the end of this article. The setup: an impulsive rally from a downtrend base, a tight handle forming while the broader market showed weakness, relative strength building as agricultural sector stocks attracted attention, and a positive catalyst. "Your risk reward is pretty tight — that's the reason why I like the trade," Gary observed. NUF met Gary's target.
Remember that past performance is no guarantee of future results, and all trading involves risk.
The top-half rule applies with particular force in harder conditions: if the setup is not in the upper half of its range, the threshold for entry should be higher. For a full breakdown of the VCP criteria checklist used to validate setups before applying tighter parameters, and context on how to identify optimal ASX momentum conditions throughout the market cycle, both references extend the framework Gary applied in the 29 May 2026 session.
Conclusion
Moving averages are not exit signals — they are the mechanism by which momentum traders stay in winning positions as long as the trend holds. The 10-day EMA identifies the fastest market leaders; the 20-day EMA identifies the next tier; and the 50-day MA is the hard floor that, as Mark Minervini's research demonstrates, often contains the entire advance from entry to exit.
The entry comes before the breakout: near-zero volume on days 3 and 4 of a handle pullback confirms that sellers are absent and the setup is constructive. The filter before the entry — relative strength, sector strength, and trend strength aligned — ensures the trade has a current behind it.
Momentum traders building this framework can start by examining whether the stocks currently in a trend are hugging the 10-day or the 20-day moving averages. That single observation immediately identifies the quality tier of each position and informs how much room to give before the trailing stop is triggered. The supporting Momentum Profile data from the 29 May 2026 session is accessible to FMP YouTube Momentum Profile members.
The analysis in this article draws on Gary Glover's recorded session and the FMP Momentum Profile data, which is published daily and accessible to FMP YouTube Momentum Profile members. Members receive early access to the educational data that forms the basis of articles like this one. The Momentum Profile data from the 29 May 2026 session — including relative strength rankings and MA positioning data for the ASX stocks discussed — is available to members. For information on FMP YouTube Momentum Profile membership, visit the FMP Momentum Profile.
Frequently Asked Questions
What is the 10-day moving average rule for ASX momentum stocks?
The 10-day exponential moving average (EMA) is the primary trailing reference for the strongest ASX momentum stocks. Gary Glover's anecdotal observation, developed across his trading career, is that a true market leader hugs the 10-day EMA throughout its move — declining pullbacks touch or approach it but do not close below it. A close below the 10-day EMA signals a slowdown in buying momentum. The 10-day EMA works alongside the 20-day EMA (for slower-moving strong stocks) and the 50-day MA (as the hard floor that ends the position when crossed on a close).
How do traders use the 50-day moving average as a stop-loss?
As Mark Minervini's "Handling Market Corrections" presentation documents, some of the greatest stock market winners go up 400–1,000% without ever closing below the 50-day moving average — the 50-day contains the entire move. William O'Neil's documented approach in How to Make Money in Stocks (2009) is equally direct: any momentum stock that closes below the 50-day MA is exited immediately. Many experienced momentum traders switch to a close-below-50-day as their primary trailing stop once a position reaches breakeven, allowing the MA to define the exit rather than a fixed price target.
What does light volume on a pullback signal in a cup-and-handle?
Near-zero volume on days 3 and 4 of a cup-and-handle pullback signals that genuine sellers have exhausted. The A-B-C structure of the handle is healthy when each successive day shows declining selling pressure. Gary Glover's anecdotal observation, developed across his trading career, is that this volume dry-up is the specific tell confirming the handle is constructive — the remaining price movement is structural, not distributional. A handle forming on heavy volume signals active distribution — the setup has not met the entry standard.
What is the difference between the 10-day and 20-day EMA in momentum trading?
The 10-day and 20-day EMAs identify two tiers of momentum stock strength. Stocks hugging the 10-day EMA are the fastest movers — they attract the most consistent institutional demand and generate the largest short-term advances. Stocks that hug the 20-day EMA are still strong performers but move at a slower pace, with slightly more supply arriving at each pullback. Gary Glover's anecdotal observation, developed across his trading career, is that this distinction informs position management: a 10-day hugger demands tighter trailing and faster decisions; a 20-day hugger gives slightly more room before the trend is questioned.
How does Mark Minervini adjust risk parameters in difficult markets?
When market conditions deteriorate, Minervini narrows parameters rather than stepping away. At the Trader Line Conference (2025), Minervini described averaging stop losses of 3–4% in tight conditions, rising to 5–6% in a poor market, with an absolute maximum of 8%. Gary Glover's anecdotal observation, developed across his trading career, is that in harder ASX conditions this translates to reducing acceptable stop risk from around 7% down to 4–5%, and lowering the target from around 20% to 12–15% — the same setups with tighter goalposts. The process does not change; only the parameters narrow.
What is the top-half trading rule for ASX momentum stocks?
The top-half trading rule requires a stock to be trading in the upper half of its chart range before entering. Gary Glover's anecdotal observation, developed across his trading career, is that a momentum trader who draws a line through the midpoint of a stock's recent price range should only be entering positions in stocks above that midpoint. Stocks below the midpoint have not re-established their trend. The one exception: a VCP that has tightened to an exceptionally narrow range, where the entry risk is so small that the position justifies the trade even if the stock sits fractionally below the midpoint.
Why do the best traders prefer moving average exits over fixed profit targets?
A fixed profit target — such as a 3:1 risk-reward system — removes a trader from a position at a predetermined price, regardless of whether the stock's trend is intact. Moving average exits keep the position open as long as the stock holds its structure. Gary Glover's anecdotal observation, developed across his trading career, is that the difference between 20–23% annual returns (fixed 3:1 system) and the 40–100%+ returns observed in top momentum traders comes directly from staying in large moves via MA trailing exits. This reflects Gary Glover's personal trading experience — individual results vary based on approach, risk tolerance, and market conditions.
This article is based on analysis and commentary provided by Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168), during a recorded market analysis session on 29 May 2026. Content has been edited and summarised by Finer Market Points for educational purposes. Gary Glover has not independently reviewed or endorsed this publication.
This content is for educational purposes only and does not constitute financial advice. Past performance is no guarantee of future results.
The information, opinions and other materials appearing on this website are of a general nature only and shall not be construed as advice. Finer Market Points Pty Ltd, CAR 1304002, AFSL 526688, ABN 87 645 284 680. This general information is educational only and not financial advice, recommendation, forecast or solicitation. This is not taxation advice. Rose Bay Equities accepts no responsibility for the accuracy or completeness of the information, opinions or other materials provided on or accessible through this website. This website has not been prepared with reference to your individual financial or personal circumstances. You should not rely on any advice on this website without first seeking appropriate professional, financial and legal advice. Further, where Rose Bay Equities makes third party material available or accessible through this website you acknowledge that Rose Bay Equities is a distributor and not a publisher of that content and that its editorial control is limited to the selection of those materials to make available. We accept no liability for any loss or damages arising from use.
Bibliography
Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168), recorded market analysis session, 29 May 2026, produced in partnership with Finer Market Points. All Gary Glover observations in this article are anecdotal practitioner observations developed across his trading career — not formal studies.
Minervini, M. "Handling Market Corrections" (presentation).
Minervini, M. Trader Line Conference (2025).
O'Neil, W.J. How to Make Money in Stocks, 4th ed. McGraw-Hill (2009).
Weinstein, S. Secrets for Profiting in Bull and Bear Markets. Dow Jones-Irwin (1988).
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