Saturday, August 24, 2002 9:00:15 PM
Using "Stocks above a certain moving average" indicators
Again, let's start with a chart of QQQ (1-year, this time, because the other charts will cover the same time frame, due to a lack of older historical data):
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1) Using the number of NASDAQ stocks trading above their 200-day simple moving average:
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When this indicator drops below the horizontal line, it indicates an intermediate-term bottom. (The horizontal line represents the level, at which the percentage of stocks trading over their 200-dma is below a treshold which, according to Investor Business Daily, marks major bottoms.) The chart does not have enough historical data for reliable speculations about how to detect tops with this indicator. Once the bottom is detected, it seems worthwhile to trade the cross-overs of this indicator with its 20-day EMA - buy when the indicator crosses above this EMA and sell when it crosses below.
2) Using the number of NASDAQ stocks trading above their 50-day simple moving average:
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This indicator is similar to the previous one. A drop to the horizontal line makrs major bottoms. Trade the cross-overs with the 20-day EMA.
Regards,
Vesselin
Again, let's start with a chart of QQQ (1-year, this time, because the other charts will cover the same time frame, due to a lack of older historical data):
1) Using the number of NASDAQ stocks trading above their 200-day simple moving average:
When this indicator drops below the horizontal line, it indicates an intermediate-term bottom. (The horizontal line represents the level, at which the percentage of stocks trading over their 200-dma is below a treshold which, according to Investor Business Daily, marks major bottoms.) The chart does not have enough historical data for reliable speculations about how to detect tops with this indicator. Once the bottom is detected, it seems worthwhile to trade the cross-overs of this indicator with its 20-day EMA - buy when the indicator crosses above this EMA and sell when it crosses below.
2) Using the number of NASDAQ stocks trading above their 50-day simple moving average:
This indicator is similar to the previous one. A drop to the horizontal line makrs major bottoms. Trade the cross-overs with the 20-day EMA.
Regards,
Vesselin
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