The 200-day moving average…
Its significance cannot be overstated.
This is the “line in the sand” that establishes whether stocks are trending higher or lower.
I’ve talked about this several times in past editions of Stock Surge Daily.
I’ve told you that I don’t buy stocks that are trading below this level – not under any circumstances.
Even in mediocre uptrends, stocks will generally hold above their 200-day averages.
If you’re not putting this indicator on your charts, you are doing yourself a great disservice.
Every major charting package has it. All you need to do is add a simple moving average and set the period to 200 days.
Charting a Broken Uptrend
Take a look at the Nasdaq 100 index in the chart below…
Even though this is a weekly chart, the white line depicts the 200-day moving average.
The market held above this line for the entire move off of the 2020 lows. But once it was broken back in mid-January, things got ugly in a hurry.
The Nasdaq made a few attempts to get back above the 200-day after that, but each of them ultimately failed.
And here we are today right back at the lows once again…
Keep It Simple
A lot of traders love indicators.
They love to overcomplicate their charts and look for dozens and dozens of signs of confirmation to determine whether stocks are going up or down.
But you don’t need to do that.
In fact, I believe you’ll be better off if you don’t.
Whether you’re buying individual stocks or trying to analyze the general market, just turn to the 200-day moving average.
Look to buy when price is above it, and sell when price falls below it.
It’s as simple as that.
Follow the Insiders
Now, there’s another easy way to get a handle on the market that has nothing to do with technical indicators of any sort…
When corporate insiders like CEOs, CFOs, executives and board members put down their own hard-earned money to buy shares of their own companies, it’s a huge vote of confidence.
After all, these folks have a footing of knowledge about their companies that Main Street investors simply do not.
It’s absolutely free to attend, so I really hope you’ll join me.
I’ll cover my strategy for trading alongside corporate insiders and generating potentially massive gains with less risk.
I look forward to seeing you there!
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
The post As Long as Stocks Are Below This Line… Stay Away appeared first on Stock Surge Daily.
