Moving Averages (MA)

U

ujjubond

New Member
#1
#1
Hi,
I am a little confused w.r.t MA's.
Does a moving average denote a possible price target for a stock?
For e.g., if a stock has the following MA's:
MA(15)=p1; MA(45)=p2; MA(100)=p3,
does that mean that the stock can reach the price p1, p2 or p3 in 15, 45 or 100 weeks respectively?

Any help would be appreciated.
Could someone also suggest some reading material on Technical Analysis?

Thanks in advance!

Regards
Ujjwal
 
SwingKing

SwingKing

Well-Known Member
#2
#2
ujjubond said:
Hi,
I am a little confused w.r.t MA's.
Does a moving average denote a possible price target for a stock?
For e.g., if a stock has the following MA's:
MA(15)=p1; MA(45)=p2; MA(100)=p3,
does that mean that the stock can reach the price p1, p2 or p3 in 15, 45 or 100 weeks respectively?

Any help would be appreciated.
Could someone also suggest some reading material on Technical Analysis?

Thanks in advance!

Regards
Ujjwal
Click to expand...

MA(15) on a daily chart for example does not mean price will reach some target. MA(15) means the average price of the stock over a period of 15 days.

I think you need to read basic books to grasp the concepts first. You can start with Technical Analysis of Stock Trends 9th Edition by Edward and Magee. This is the bible of Technical Analysis.

Tc
 
U

ujjubond

New Member
#3
#3
Raunak,
I understand the MA(15) shows the average price for 15 days on a daily chart. Then how do traders derive the support & resistance from MA's?
 
M

Mangafreakz

Well-Known Member
#4
#4

This should help you as to how you can use a MA as S/R. The blue line is 50 MA. At the green arrows you will find that everytime its finding Support on the 50 MA line.
 
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