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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: SpongeBrain who wrote (8990)	12/13/1998 3:19:00 PM
From: Richard Estes	Read Replies (1) \| Respond to of 12039

No, not really. The initial cross is often an explosive one that offers quick returns. As profits are taken, the stock often returns to support or the MA to assure those that the bounce will carry them higher. It is a form of confirmation. But the important thing is the sell when the MA is crossed to the lower side. There is nothing magical about the periods (50) chosen. You apply the one that is in keeping with your goals. If you use 50 or 10 weeks, you expect the cycle from major low/high to major low/high to be 100 or 20 weeks. If you had chosen 9 or 1.8 weeks, you expect a cycle of 18 or 3.6 weeks to occur. When a stock trends, it can move far beyond the cycle, moving for months without nearing the MA. the distance between price and the MA is the measure of risk you are taking on loss profits.