One Easy Stock Indicator Everyone Should Know!!
The stock market can be confusing. Prices go up and down every day, and it’s hard to know when to buy or sell. But there are tools called stock indicators that can help you make better decisions.Here I am explaining one simple Indicator that is very helpful: Moving Averages.
Moving Averages (MA)
A moving average shows the average price of a stock over a certain time. It helps you see the main trend without being confused by small price changes.
How it helps :
- If the price is above the moving average, the stock is usually going up.
- If the price is below the moving average, the stock is usually going down.
Lets see some example
In the below left picture I have plotted Moving average for 3 days and on the right side I have plotted moving average for 5 days for NVDA stock.

Lets analyse!!

In the above plot, I have plotted MA 3 and MA 5 together!!
On 29th Sep MA 3 crosses MA 5 above and the slope of the MA 3 & MA 5 seems to be more that 45 deg. which can give a good signal that for next few days we can expect a good price rise.
Before 3rd Oct the slope of MA3 & MA5 become flat and on 3rd Oct MA 3 crosses MA5 below, which can suggest not the price can drop for few days!!
On 13th Oct MA 3 crosses MA5 below with high slope, which suggests more drop can be expected in coming few days.
Around 16th Oct - 20th Oct MA3 and MA5 is flat and MA 3 crosses MA 5 above on 24th with very good slope, which suggest a good price jump can be expected and it did happened.
At present MA 3 is below MA 5 but getting flat. So few days consolidation then if MA3 crosses the MA 5 above we can see good price jump!!
Now lets see example of QBTS

In the above we can see on 8th Sep MA 3 crosses MA5 and slope becomes better and how the price jumps!
17th Oct MA 3 crosses MA 5 below with high slope and how the price drops!!
Now try it by yourself for your favourite stocks!! and observe is it a worthy analysis!!
And here I have used MA3 & MA5 to find small time frame trend. You can try MA 5, 10, 20, 30 or more for long term trend!!
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