من قبل
Frank Avitia , Managing Director , AIS Investment Services
The200 Day Moving Average is a long term moving average that helps determine overall health of a stock.
The percentage of stocks above their200 Day Moving Average helps determine overall health of the market. When this number gets below20%, many traders look for a sharp reversal in the market that can quickly bring the number up to40%. When this number gets above85% or90%, many traders look for a reversal in the market.
The200 Day Moving Average often works as a major support level in a bull market. This can present a low-risk opportunity to buy a stock, however a break below it can lead to a large gap downward. In a bear market, the200 Day Moving Average often works as a major resistance level, however a break above it can lead to a sharp rise.
In a bull market, a buying signal may be generated as the stock dips close to the200 Day Moving Average and a sell signal may be generated when it goes far above its200 day Moving Average. In a bear market, a buying signal may be generated when it dips far below its200 Day Moving Average, and a sell signal may be generated when it rises close to its200 Day Moving Average.
من قبل
Sarfaraz Ahmed , Senior Vice President, Capital Markets , Pak-Kuwait Investment Company
A move below the200 DMA suggests that the bears are in control of the price action and that the asset/market will likely move lower. Conversely, a cross above a moving average suggests that the bulls are in control and that the price may be getting ready to make a move higher.