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The simple moving average is an easy way to analyse stock charts. Using technical analysis and the SMA, we can see the trend of a stock. We can’t predict the future, but using this trend line, we can get an idea if a stock is bullish or bearish. To calculate the simple moving average, we just take the number of days you want to set, get all the prices for those days, and divide by the number of days. For a 5 day simple moving average, we take 5 days of stock prices, and divide to get th everage. Moving back a day for more averages. To use these new lines to predict stock moevment, we can just look at when the stock price goes above the moving average line. For example if Apple stock is trading above the 50 day average line, it’s a good sign. If Apple is trading below the 50 day line, it means the price is below the average price, meaning bad news. We can also use two simple moving average lines for more information. If the short term moving average line crosses with the long term line, it’s a big sign. If it’s above, the stock is bullish and might keep going up, if it goes below the long term, it’s a bearish sign. The simple moving average also acts as support for stocks. Apple’s stock price might bounce back whenever it hits the 200 day average because investors will protect that area, making sure the stock stays healthy. Using this technical stock analysis along with the normal stock valuation can help you get an edge in the stock market.