The 200 day moving average is another very important moving average because it is observed by almost all traders. Whether a stock is above or below its 200 MA brings great significance. Most traders and investors will rarely touch a stock that is below its 200 MA. Before you continue, do take a read of the article how to use the moving average to analyze stocks if you haven't read it.
Surprisingly, the 200 MA can act as a very good support. Since this moving average is watched by so many people, it sometimes can be a self fulfilling prophecy. Stocks tend to bounce off the 200 MA.
The 200 MA can also act as a resistance. A stock tends to find it difficult to rise above a declining 200 MA.
The next time you see a stock approaching its 200 MA, take note. You might find it reverse when it hits the 200 MA. Some traders even create trading strategies which employ the 200 MA.
Aug 17, 18 05:07 AM
In this lesson we will take a look at the technical developments of OKA Corp's stock price and why it moved the way it did. We will also have a look at what might happen to OKA's stock price.
Aug 16, 18 07:28 AM
In this lesson, we will learn how and why BMY manage to bottom out and start a new uptrend.
Aug 14, 18 08:19 AM
In this lesson we will learn and examine why Pentamaster was able to recover all of its losses to start a new uptrend and achieve new highs.
Aug 13, 18 05:56 AM
The KLCI is currently at resistance territory after a nice big rally. I would consider a sideways trading a possible scenario at the moment.
Aug 13, 18 05:22 AM
In this lesson, we will learn how AAPL's 15 Min stock chart formation help to send the stock higher for 2-3 days to give traders a nice swing trading opportunity.