In this video i cover some simple topics
Why is 200 day moving average used since decades ?
Is it an important support ?
Number of trading sessions in a year ?
When should one use 200 day moving average ?
Looking at how 200 day moving average could give entry points in bull markets.
Would like your comments.
Nooresh Merani
April 22, 2015
Very well explained 200 day moving average concept!
Would highly appreciate if you can share your view on Sensex target in 2016-17 based on Technical Analysis using Dow Theory.
Fundamentally speaking, as of now i.e. 21st April 2015, Sensex is at 27676 and PE ratio is 19.05!
Thank you in advance
Smit
April 22, 2015
I dont try to put a year end target. Stick to following the trend. The long term trend is up for now.
April 22, 2015
Nooresh,
Your views on 200 day makes good observation and is an early suggestion for investors to act. I would suggest you also look at the SMA (20) on monthly charts of Nifty which is more reliable for positional investors. It is about time that Nifty touches this line (last touched on 30/9/13) now around 7426 and increasing by about 125 points every month. So around approx 7600 (next month) should be an excellent area for long term investors.
Sekhar Krishnan
April 22, 2015
Hi Shekhar
First of all as i said in the video no moving average day number is sacrosanct or a strong support. Its an illusion. The only reason we use the 200 dma is because the world does and somewhere a yearly average makes sense. How does 20 SMA do so ?
April 22, 2015
Nooresh,
Your point well taken.The SMA(20)on monthly Nifty chart is the center line of Bollinger Band which is generally the mean reversal in any stretched move on either side.In an extreme bullish scenario, like the one we are experiencing, my observation is that at least around once a year or thereabout Nifty retraces to test the SMA (20). Check out S&P in Oct 2014 when it touched a low of 1820 (SMA 20 monthly at that time on S&P was 1801)when it was least expected and then it has bounced back sharply. I just feel that we may experience the same in our market. More than an exact figure I feel it will soon touch or at least come close to SMA (20)on monthly chart on Nifty. I believe the best time for positional trades working in your favor is when Nifty trades above SMA (20)on monthly chart. In case it trades below, you need to be extremely careful for positional trades but would favour traders to go short.
April 22, 2015
informative, how to decide when to sell/book profits………..entry level is ok but exit level is even more important i guess 😀
April 22, 2015
If you look at the video and look into the part of 2008. You might get a way to time the exit too although late.
April 22, 2015
Dear Nooresh,
very well explained as usual !
you are master of moving average cross over and as far as i know it has been a major tool for stock selection for you. i feel a video of use of moving average cross over may benefit lot of people.
Regards !
Pankaj Shah
April 22, 2015
Lets see will try to create more videos