Moving averages

Current index : 3760

Moving averages are perhaps the simplest measures of indicating the market trend. The fact has been corroborated time and again. Though it does not give any advance indicators of the market trend like the Elliot wave and other advanced technical tools but still reliable. There are moving averages to indicate short( 5,20) ,medium( 50,100) and long term trend ( 200) - we also have the simple and exponential moving averages.

The Nifty in the current fall clearly took support at the 200 DMA ( 3550 range ) not once but twice. The fall was propitious after breaking the 50 DMA ( 4019 ) which will become a significant resistance for any market rise, though there are resistance points based on other technical factors. I feel the market will go down below the 200 DMA this month - I have not seen any kind of capitulation and panic selling happening which is important for the markets to keep rising in the long term.