Identifying a trending stock requires a combination of indicators that confirm price momentum and trend strength. Some of the most effective technical tools include:

Moving Averages (MA) – The 50-day and 200-day moving averages help determine the trend direction. A stock trading above these averages (especially in the correct order: 50 > 200) suggests an uptrend, while trading below indicates a downtrend. A moving average crossover (e.g., 50 crossing above 200 – "Golden Cross") can signal a trend reversal.

MACD (Moving Average Convergence Divergence) – This momentum indicator helps confirm trends. A bullish signal occurs when the MACD line crosses above the signal line, while a bearish trend is confirmed when it crosses below. Divergence between MACD and price can also warn of potential trend reversals.

ADX (Average Directional Index) – ADX measures trend strength rather than direction. A reading above 25 suggests a strong trend, while below 20 indicates a weak or ranging market. The +DI and -DI lines help determine bullish or bearish momentum.

Relative Strength Index (RSI) – While primarily an overbought/oversold indicator, RSI staying above 50 in an uptrend (or below 50 in a downtrend) confirms momentum.

Combining these indicators improves reliability—for example, a stock above its 200 MA, with rising MACD and ADX > 25, confirms a strong trend worth trading. Always use multiple signals to avoid false breakouts.