The battle for the 200-Day Simple Moving Average (SMA) is one that financial analysts and investors are still closely monitoring. With the stock market at its highest level in more than a decade, investors are eager to see which way the market will move once the 200-day SMA hits.
The 200-day SMA is widely used by professional traders and investors as an indicator of a long-term trend direction. Traders and investors look to the 200-day line for a sign that the current trend that has developed is likely to continue in the short-term, or possibly even reverse course.
When the 200-day SMA is breached, investors and analysts alike analyze what has caused the breach and if it is likely to remain breached or reverse course. Over the long-term, the 200-day SMA has served as an excellent predictor for long-term stock market trends.
In the short-term, however, the 200-day SMA can be difficult to read as a reliable indication of a trend as it is not always as reliable a sign of an upcoming breakout or breakdown as traders and investors might hope. This is primarily because shorter-term fluctuations in a company’s stock price can take precedence over a longer-term trend gesture.
That being said, the battle for the 200-day SMA is still an important one that financial experts and investors will continue to watch. The 200-day SMA can be an effective sign to whether a long-term uptrend or downtrend is likely to continue, so any traders and investors looking to capitalize on the stock market’s movements should definitely watch this closely.