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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (780)	5/4/1998 11:30:00 AM
From: Arthur Tang	Read Replies (2) of 1471

Yahoo, quotes, chart now offers moving averages of 50 days and 200 days. It is always interesting to look at more indicators. Moving averages are trailing indicators. It represents average cost of the stock for the last 50 day period or 200 day period. Simple way of interpretation is that if the average cost of the stock for that period is less than the current price then the stock is not likely to pull back. While if the average cost of the stock for that period of time is more than the current price; more people may sell the stock and cause another pull back. This is based on human psychology; that if the stock made money, people are happy with it. If it lost money then people would get rid of the stock. Technical analysis do not take fundamentals into account nor the pending news of the company. So, the value of moving average as an indicator is next to nil.

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