Moving averages play a prominent role in determining the overall market trend. Stocks trading above averages indicate a bullish view, which further leads to an upside rally that capitalises on volume. In short, stocks trading above moving averages witness a rise in volumes as the price starts to gradually move north.
Broadly, three moving averages are considered while looking for short to medium-term trade. This includes 50-day moving average (DMA), 100-DMA, and 200-DMA. Among these, the 200-DMA is most applicable. It identifies the price movement from one year's perspective. ...
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