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when the trend line cross the moving average 200 day from the bottom, what the action as investor will you do?

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Question added by Shadi Milhem , Group Finance Director , GCCETL
Date Posted: 2013/06/11
walid mohammid samir abd el latif
by walid mohammid samir abd el latif , 6 year in Portfolio Manager , optima

its chance to buy this stock

Frank Avitia
by Frank Avitia , Managing Director , AIS Investment Services

The200 Day Moving Average is a long term moving average that helps determine overall health of a stock.
The percentage of stocks above their200 Day Moving Average helps determine overall health of the market.
When this number gets below20%, many traders look for a sharp reversal in the market that can quickly bring the number up to40%.
When this number gets above85% or90%, many traders look for a reversal in the market.
The200 Day Moving Average often works as a major support level in a bull market.
This can present a low-risk opportunity to buy a stock, however a break below it can lead to a large gap downward.
In a bear market, the200 Day Moving Average often works as a major resistance level, however a break above it can lead to a sharp rise.
In a bull market, a buying signal may be generated as the stock dips close to the200 Day Moving Average and a sell signal may be generated when it goes far above its200 day Moving Average.
In a bear market, a buying signal may be generated when it dips far below its200 Day Moving Average, and a sell signal may be generated when it rises close to its200 Day Moving Average.

Sarfaraz Ahmed
by Sarfaraz Ahmed , Senior Vice President, Capital Markets , Pak-Kuwait Investment Company

A move below the200 DMA suggests that the bears are in control of the price action and that the asset/market will likely move lower.
Conversely, a cross above a moving average suggests that the bulls are in control and that the price may be getting ready to make a move higher.

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