Moving averages are one of the most widely followed indicator
in technical analysis.
Simply put, when the price of an index or stock stays above a particular
price moving average line on a chart, that price level serves as support —
a level where buyers reside.
If the price falls below a moving average line and “can’t” break
through from the underside, this price level is a line of resistance —
a price level where sellers hover.
That’s an easy explanation of moving averages for you.
This
article, DJIA’s 200-Day Moving Average,was syndicated by Elliott Wave International. EWI
is the world’s largest market forecasting firm. Its staff
of full-time analysts lead by Chartered Market Technician Robert
Prechter provides 24-hour-a-day market analysis to institutional
and private investors around the world.
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