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February 4, 2008 | 18 Comments

What moving averages do you use?

I USE THE 50 AND 200 SIMPLE MOVING AVERAGES AS THESE
ARE THE TWO MOVING AVERAGES THAT HAVE BEEN USED
HISTORICALLY BY THE GREATEST MUTUAL FUNDS WHEN THEY GO
TO SUPPORT THEIR TOP HOLDINGS WHEN THEY HAVE PULLED
BACK. IN BULL MARKETS, THE BEST STOCKS WILL EITHER
BOUNCE DIRECTLY OFF OF THESE TWO AVERAGES OR THEY WILL
“HANG OUT” AROUND THESE TWO AVERAGES BEFORE RESUMING
THEIR UPTREND. IN STOCKS THAT GO INTO EXTREMELY
PARABOLIC RUNS YOU CAN USE THE 21 DAY MOVING AVERAGE
AS THIS HAS BEEN A POPULAR MOVING AVERAGE RECENTLY IN
TOP STOCKS.

What are some other secondary indicators you use besides price and volume?

THERE REALLY ISN’T ANYTHING I USE BESIDES PRICE AND
VOLUME SINCE EVERY TECHNICAL INDICATOR IS BASED OFF OF
PRICE AND VOLUME AND SOMETIMES TIME. I DO LIKE TO LOOK
AT THE RELATIVE STRENGTH OF A STOCK IN RELATION TO THE
SP 500 AS STOCKS THAT ARE USUALLY RANKED 70-99
OUTPERFORM THE REST OF THE MARKET BY QUITE A MARGIN. I
ALSO LIKE TO USE BOP (A PROPRIETARY INDICATOR BY DON
WORDEN ON TELECHART) WITH SMALL-CAP AND MID-CAP STOCKS
AS POSITIVE DIVERGENCES AND GREEN TO MAX GREEN BOP HAS
CORRELATED TO SOME EXTREMELY LARGE PRICE GAINS

Posted by MarketSpeculator | Filed Under FAQ