{LONGTERMINVESTORS} How to Use Moving Averages Part -II

In Continuation of Previous Post

Interpretation

The most popular method of interpreting a moving average is to compare the relationship between a moving average of the security's price with the security's price itself. A buy signal is generated when the security's price rises above its moving average and a sell signal is generated when the security's price falls below its moving average. Moving can be used for

1. finding Support and Resistance
2. Trend Identification.

Let discuss both of them with example.

Finding Support and Resistance

The following chart shows the S&P 500 from May 2012 through Jun 2013-07-01

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Rgds,

Bramesh

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