Spot Trends And Sell Signals With 200-Day Line

While the 50-day moving average seems to get the most attention, investors should also use the longer-term 200-day line.

The 200-day moving average can help you with your trading. Like the 50-day line, the 200-day average can be used as a trend indicator, and it can act as a level of support or resistance. It can be used to give sell signals in some cases, too.

Simply put, the 200-day line adds up a stock's latest 200 closing prices and divides that number by 200.
The 200-day line can also point you to sell signals. If you've been lucky enough to ride a big winner for months, consider selling if the 200-day moving average starts to roll over. It's a sign that the stock is losing momentum.
Investors should also sell when a stock breaks the 200-day line in heavy trading after a long uptrend. But this is a late sell signal. Source

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