Moving Average Methods of Trend Following
Technical Analysis of Stock Prices
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A moving average line is a trendline. using the past data of prices moving averages of various durations can be calculated. Some of the popular moving average periods are 10-day, 50-day, 100-day and 200 day moving averages. Normally in an uptrend the price points plot over a moving average line. If the daily prices start crossing the moving average line from above and starting plotting below, there is the indication of downtrend.
Similarly in a downtrend, daily prices plot below the moving average line. If they cross the moving average line from below and start plotting above the moving average line, there is an indication of upward trend.
200-day moving average is taken as indicating a long-term trend.
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