| Technical analysis of a stock is done using various | | | | But most common one's are 15, 50, 100 and 200 |
| indicators and charts for short term trading or some | | | | DMA. Some person even makes use of 30 DMA. |
| analyst use it for mid term to long term. Short term | | | | 200 DMA is considered very important. Currently |
| trading from one week to one month or may be till | | | | Indian stock markets are trading near 200 DMA after |
| couple of months. | | | | taking support of same. |
| Technical indicators are part of technical analysis | | | | Note - No need to do any calculation to find moving |
| which mostly used to analyze stock price direction, | | | | averages, they are readily available on various |
| trend, support and resistance, over bought and over | | | | websites. |
| sold status and so on. | | | | Moving averages are also considered very important |
| Technical analysis is purely based on technical | | | | in locating support and resistance for a stock. |
| indicators and charts it is not at all related to any | | | | For instance - If the stock price is below 15 DMA |
| fundamental terms nor it is based on any news or | | | | then its 15 DMA is considered as its resistance and |
| speculations, due to these reasons technical analysis | | | | after moving the stock price above its resistance |
| may turn negative if any fundamental change or on | | | | then |
| any news or speculation takes place so it is very | | | | It would take its next resistance at 50 DMA (some |
| important to take appropriate steps while taking | | | | people considered at 30 DMA) and 15 DMA would |
| trading decision based on technical analysis. | | | | become its support. |
| Following are the very commonly used technical | | | | Even some analyst trades like if stock price moves |
| indicators - | | | | above 15 DMA then buy and sell when that price |
| Importance of Moving Averages | | | | touches back to 15 DMA provided over all market |
| Moving Average - The stocks average closing price | | | | conditions are in appropriate phase. At the same time |
| for period of certain days. | | | | it is also said that using only moving averages is not |
| For example - 15 day moving average (DMA) is the | | | | advisable to take any trading or investment decision |
| average of stocks closing price of last 15 days. | | | | but in fact moving averages provides best results |
| Generally different analyst and technical expert's use | | | | when used with other indicators like RSI, MACD, and |
| different moving averages. | | | | ADX etc. |