Market Timing Strategy of Purchasing Stocks

19 May

A winning timing strategy will make excellent returns and exit losses rapidly. This requires an investor to know when to purchase and sell the stocks in the market. It is very frequent that investors like to use spreadsheets (SS), graphs and charts to analyze and find the correct timing for purchasing stocks.

There are stock market timing and strategies that work! Market timing frequently looks at a variety of moving averages such as the 40- and 200-day moving average, two of the most broad used indicators.

The 200 Day Moving Average is a very long term calculate that helps decide the overall health of a stock market. A stock market that trades below its 200-day moving average is deemed to be in a long-term down trend and is considered as unhealthy. The idea is quite simple: it is considered a purchase signal when the 40 day moving average of a stock crosses above the 200 day moving average.

A stock that trades above its 200 Day Moving Average is deemed to be in a very long-term uptrend and is usually careful to be a healthy suggestion. In other words, a healthy stock will usually see an increasing 200-day moving average.

If the market has gone more than the 40 and/or 200 day average that should be considered bullish, while below would be a bearish indication.

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