Three Basic Technical Indicators Before You Buy or Sell A Stock
1. Moving Average Crossovers
Chart analysts like to employ this tool to identify the trend
reversal signal. This is how it works: There are two lines, a fast
line with shorter-day moving average (say, 10), and a slow line
with longer-day moving average (say, 20). When the fast line
crosses over and above the slow line, it indicates a buy signal;
conversely, when the fast line is below the slow line, it indicates a
sell sign.
Illustration:
10-day & 20-day
This combination of moving averages is good for analyzing fast
moving stocks because it is more sensitive to price change. But,
there is one major disadvantage – it generates quite a number of
whipsaws or false signals.
Buy Signal
A buy signal is triggered when the 10-day moving average crosses
over and above the 20-day moving average.
Sell Signal
A sell signal is triggered when the 10-day moving average crosses
below the 20-day moving average.
To know more about technical analysis, please refer to www.
stockcharts.com
| Tip #4 - About Technical Analysis |
 | |  | |  | |  | |  |
Copyrights 2010 by Sigma Wealth Sdn Bhd. All Rights Reserved.