30 stock above 200 DMA(200 day moving average),How to find them?

    So you want to trade in stock above 200 day moving average?

    Well, we got you sorted.

    In this article, we look at 30 of the best 200 DMA that you can invest in. let’s get into it.

    How do I find 200 DMA of a stock?

    Calculation for a 200-day moving average is similar to a 50 and 100-day moving average. They all use the same data points to come up with a moving average. For example, you calculate a 50-day moving average by summing up the past 50 data points and dividing by 50.

    Similarly, the 200-day moving average requires you to sum up the past 200 data points and then divide by 200. Traders use these averages to determine the precise time to enter or exit a position. As such, they view these averages as resistance or support during the trade.

    Most traders view simple moving averages (SMA) as less risky positions to start transactions since they are an average price of what all traders have paid for in a specific period of time. The 50-day moving average corresponds to the average price traders have paid over a period of 10 weeks.

    The 200-day moving average is the average amount paid over the last 40 weeks. If the price of the asset falls below this price, it is considered a resistance since traders are more likely to close positions. This is in a bid to prevent huge losses. This is the reason many technical analysis enthusiasts term moving averages as support or resistance in the market.



    200 Day Moving Average Strategy Guide

    So, if you want to use the 200-day moving average, here is a detailed strategy for you

    What is 200-day moving average?

    As mentioned, it is the sum of the previous 200 data points divided by 200. Here, you look at the last 200 days of the asset’s price giving you a moving average over a long time.

    How to use 200-day moving average

    The 200 DMA presents you a long-term moving average of an asset. In essence, it allows you to use a long-term trend in the market. This means you can make better trading decisions compared to using a 50 DMA or lower.

    If you calculate your 200 DMA and find the price of the asset below it, you should look for selling opportunities. On the other hand, looking for buying opportunities if the price of the asset is above the 200-day moving average.

    Techniques to use to enter a trade when using 200 DMA

    Support and resistance

    The simplest technique to use is support and resistance. Support is a chart area where there’s potential of many traders placing a buy order. Resistance is an area on the chart where most traders are likely to place a sell order.

    As mentioned, if the price falls above the 200 DMA, place a buying order and vice versa. There are different types of support and resistance. They include:

    Minor support/resistance

    This is a temporary support or resistance that delays movement of prices within the market. It can temporary delay rising or falling of prices. It is an artificial horizontal line in an area, which was previously a support or a resistance.

    Major support/resistance

    This type of support or resistance stops the rising or falling of prices within a large market movement.

    200MA bounce

    Here, the price of the asset bounces back once it approaches the 200 DMA. This is an opportune time to enter the market, especially if the bounce is within the same range as the support/resistance of the asset.

    Ascending and descending triangles

    Ascending triangle shows up in a bullish market. It indicates that the price of the asset is poised to rise. In it, you will find higher lows and higher highs as it approaches the resistance level. This indicates that there’s less selling pressure, traders are willing to pay more for the asset, and buy stop orders are above the resistance level.

    Descending triangle shows up in a bearish market. It connects a series of lower highs indicating the price of the asset is falling. Once there is a breakdown in the asset’s price, traders are likely to enter a short position, further driving the price down.

    Bull flag

    As the name suggests, it is a bullish chart pattern showing the strength of buyers in the market. It also shows the inferiority of the sellers in the market. As such, you can expect to see small candles on your chart.

    As simple as its name sounds, it can be hard to trace it. Here is a simple way to go about it:

    ·       The flag should precede an upward trend, which acts like a pole.

    ·       After this, there should be a downward slope, which acts like the bull flag itself.

    ·       However, the downward sloping consolidation should not be more than 40%. If more, then that is not a bull flag.

    ·       Should it be a bull flag, enter the market at the bottom of the flag.

    ·       Wait for the price to break higher. Ideally, similar size as the flag pole.

    How to identify the right market cycle

    As you’d expect, the market is dynamic. It forms different trends and ranges meaning you cannot count on one of any to make a precise trading decision.

    Luckily, four stages can help you identify the market cycle. They include:

    Accumulation

    This is the stage of consolidation and often occurs after a downward trend. Here the 200DMA will stagnate meaning there’s no clear trend.

    In short, the buyers and sellers are at an equal level. As such, the market is poised to move on either directions. However, the longer the accumulation phase, the more explosive the advancing stage after the break out will be.

    Advancing stage

    The advancing stage or run-up phase occurs when the break out of the price is higher than the accumulation phase. Here, there’s an uptrend in your chart and the price falls above the 200-day moving average. It is in this stage that you enter a buying position.

    Distribution phase

    As you’d expect, there’ll reach a point where the sellers will put more pressure causing the price of the asset to fall. This is what happens in the distribution phase. While it may look like an uptrend, the 200 DMA will stagnate and the price might “whipsaw” around.

    This shows the market is undecided. As such, there’s no clear trend at this point. This means the market could break in either direction. Like in the accumulation stage, the longer the phase, the more explosive the break out.

    Declining phase

    Should the price after the distribution stage fall, the market enters the decline phase. It displays a downtrend coming with lower lows and lower highs. This means the 200 DMA will be higher than the current asset price. It is at this stage you should look for selling opportunities. After this, the market is poised to go back to the accumulation phase.


    Which moving average is best?

    There are two distinct moving averages: exponential moving average (EMA) and simple moving average (SMA).

    The difference is how fast they respond to price changes. The EMA changes direction faster than SMA. It also moves faster compared to its counterpart. As such, EMA tends to favor recent price changes. Since EMA reacts quickly to price action, it can lead to a trader falling for false signals. SMA on the other hand can have you enter later missing vital opportunities.

    What is a 200-Day Moving Average?

    This technical indicator maps a security price action within the last 200 data points. In essence, it maps the average closing price of an asset for the last 200 days.

    How to calculate the 200-day moving average

    Calculating a 200 DMA is as easy as summing the closing price of each of the 200 days and dividing by 200.

    (Sum of all 200 data points)/200 = 200 DMA.

     


    Comments

    • December 7, 8.00
      D. jhon shikon milon

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