Technical Analysis of MA Indicator

Trend Identification

The stock indices moving average indicator can be used as an technical indicator for generating stock signals. A buy or sell signal is generated when price either moves above or below the moving average technical indicator, respectively.

If the MA is heading upward in diagonal manner then general market trend is up-wards.

If the on the other hand the MA is heading downwards in diagonal manner then general market trend is downward.

Upward Trend/Bullish Trend

If the MA is moving up, then the trend is up-ward & the signal generated is a buy/bullish stock index trade signal.

As long as the price is above the moving average then the stock trend will remain as an up-ward trend. The moving average will act as a 'support level' & price action of the chart candlesticks should not close below the Moving Average.

Buy Signal

When the price moves above the MA and closes above the moving average, a buy stock index trade signal is generated.

Stock Traders, who want to confirm the stock trade signal before implementing it, should wait until the MA line turns and starts to move in an upward stock trend direction. It is always best to wait for the confirmation signal so as to reduce chances of a stock indices whipsaw.

Upward Trend - How to Day Trade Stock Indices: A Detailed Guide to Day Trade Strategies

Downwards Trend/Bearish Market

If the MA is moving down, then the trend is downwards and the signal generated is a sell/short stock index trade signal.

As long as the price is below the MA then the stock trend will remain as a downward bearish trend. The MA will act as a "resistance level" and price action of candlesticks should not close above the Moving Average.

Sell Signal

When the price moves below the MA and closes below the moving average, a sell stock index trade signal is generated.

Traders who want to confirm the stock signal should wait until the MA line turns and starts to move in a downward direction. This will reduce the chance of trading a stock indices whipsaw.

Downward Trend - How to Day Trade Stock Indices: A Detailed Guide to Day Trade Strategies

Stock Indices Trading Range Market trading signals

Range Market signals can also be identified using the Moving Average Indicator.

Moving Average Crossover Method Stock Indices Strategy

The MA cross over method is also another stock index trading signal generation strategy that is more favored by traders compared to the above stock signal generation strategy method. Moving average crossover stock indices strategy is also the simplest form of a stock indices system widely used by online stock index traders. This MA crossover method is combined with other technical indicators to form more complex stock indices systems and stock index strategies.