Moving Average Software for Stock Investing
Moving average software can assist investors as they work through the stock research process. A popular tool among many stock investors, moving averages are easy to understand and use as they smooth out a price data series and provide visual clues regarding price trends. While moving averages are seen as a tool used primarily by technical investors, they can provide an important data point for any fundamental investor who wishes to incorporate stock price trends into stock investment decisions.
What Are Moving Averages?
A moving average is a technical indicator that averages the value of the price of a security (e.g. a stock) over a given number of periods. In reviewing moving averages, the investor looks to identify levels of support and resistance and measure the direction and momentum of the stock’s price. In analyzing moving averages, traders will usually confirm an uptrend when a shorter-term moving average (e.g. 50 day) crosses above a longer-term moving average (e.g. 200 day). A downward price trend is confirmed when the opposite is true.
Moving Average Crossovers
As stated above, moving average crossovers can act as significant indicators to stock traders:
Golden Cross: When a shorter-term moving average crosses above a longer-term moving average. A golden cross is seen as indicative of a coming bull market.
Death Cross: When a shorter-term moving average crosses below a longer-term moving average. A death cross is seen as indicative of a coming bear market.
Moving Averages for Support and Resistance
Technical traders often monitor moving averages as a way to identify levels of price support and resistance. Generally speaking, a stock that is in an uptrend will find support at its moving average level. Conversely, the stock will find resistance at its moving average level if it is in a downtrend.
Moving Averages and the Stock Research Pro Software
Stock Research Pro is a desktop software package that streamlines the stock research and analysis process. As part of this process, Stock Research Pro includes a module for the review and assessment of moving averages and associated trading volumes. The software includes a video tutorial series to assist the user through the process.
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The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.
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