Breaking Above the 200-Day Moving Average Signals Further Gains Ahead
May 1st, 2009 | By Charles Delvalle | Category: Chart of the DayAnyone who follows a chart knows that the 200-day moving average can give clear signals whether a stock is in a bull run or a bear run. Since the moving average is for 200-days, it gives you a clearer picture of the fundamentals driving a company.
With that said, a stock breaking above its 200-day moving average should be viewed as a bullish thing.
Take a look at the chart below of Apple (NASDAQ:AAPL).
As you can see, Apple first plummeted under its 200-day moving average back in September. And it went on to drop nearly 50% within three months.
But just recently, in mid-April, Apple popped back above its 200-day moving average. That was almost ten bucks ago.
The lesson should be clear, buying into a stock that’s crossing its 200-day moving average it typically a good idea (pending a little research on your part).
Some stocks recently crossing their 200-day moving averages are BHP Billiton (NYSE:BHP), Advanced Micro Devices (NYSE:AMD), Micron (NYSE:MU), Toyota Motors (NYSE:TM), and Sony (NYSE:SNE).
Charles Delvalle is a self-taught market-timing professional and value analyst who's followed and invested in the market for the past ten years. He uses a unique combination of technical and fundamental research to pinpoint rapid profit opportunities with stocks and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering undervalued, cash-rich companies. He frequently mocks government stupidities and points out the "inaccuracies (or lies, take your pick) that government reporting frequently dispels as "truth".
Good analysis. I put together an analysis you might be interested in on the S&P related to the 200 day moving average with some historical examples.
http://www.nakedhedgefund.com/finance/hello-200-day-moving-average-long-time-no-see-some-analysis/
Nick
MON is another to look at that just crossed above 200d avg and is now at support 30d avg and 200d avg