How The Flat 200 MA Hints Of An Uptrend In Stocks

A flat 200 MA can often help to give us hints that there may be an uptrend in a stock soon. It is useful in all time frames. The 200 MA or 200 day moving average is like a leash and the stock is like a dog. Every time the 200 MA is near, the stock will eventually leave it. But when it is too far from its 200 MA, it will soon snap back near the 200 MA.

So, how does the flat 200 MA tell us of an uptrend?

  1. When a downward sloping 200 MA starts to flatten, it hints us of a possible uptrend
  2. When the stock crosses from below to above its 200 MA, be ready for a possible uptrend
  3. A stock that consolidates and trade sideways near the 200 MA will eventually start a possible uptrend

Let us look at many examples below in multiple time frames to see the power of the 200 MA.

Notice how every time the stock moves near the 200 MA it will eventually go away from it? So, when you see a stock hugging its 200 MA no matter what time frame, get ready for some big action. Stock will always move away from its 200 MA and after some time away from the 200 MA, they will always go back to meet their 200 MA.

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