Moving Average Support and Resistance Levels

Moving Averages can be used as points of support & resistance on stock index charts.

When stock index price reaches the moving average, the Moving Average level can act as a point of support or resistance for the stock index price.

Buy Stock Indices Signal

If stock index price is on an upward stock indices trend and starts to retrace, then most traders might wait to buy at a better stock index price when the price hits a support level. Traders will sometimes use the Moving Average to determine the support level.

A buy signal is generated when price hits the Moving Average, turns and starts moving in the upward trend direction. The stock indices signal is confirmed when price closes above the Moving Average. Because many traders use the moving averages to generate stock indices signals, stock index price will normally react to these levels.

A stoploss should be set just below the Moving Average stock indices Indicator. Ideally it should be set a few pips below the previous low.

Buy Stock Indices Signal - How to Trade Stock Indices Trading with Moving Average Strategy

Sell Indices Signal

If the stock index price is on a downward stock indices trend and starts to retrace, then most traders might wait to sell at a better stock index price when the price hits a resistance level. Traders will sometimes use the Moving Average to determine the resistance level.

A sell signal is generated when price hits the Moving Average, turns and starts moving in the downward stock indices trend direction. The stock indices signal is confirmed when price closes below the Moving Average. Because many traders use the moving averages to generate stock indices signals, stock index price will normally react to these levels.

A stoploss should be set just above the stock indices moving average indicator. Ideally it should be set a few pips above the previous high.

Sell Stock Indices Signal - How to Trade Stock Indices Trading with Moving Average Strategy

Resistance Level turns Support Level

In Stock Index - When a resistance level is broken it turns into support and vice versa.

This happens when the fundamentals of a stock indices trend change and consequently the direction of a stock indices. The direction change is reflected by the moving average stock indices technical indicator, the direction is confirmed when the resistance zone turns into support level or vice versa (when support area turns into resistance level)

Resistance Level turns Support Level - Moving Average Stock Indices Strategy Example