![]() You can use various EMA periods to determine support and resistance – 10, 20, 30, 40, 50 are often used. Here’s an example – The 1 Week charts of Lupin (Typically used by Medium Term Investors):Īlways remember that if you must keep checking lower and higher timeframes to ascertain the short and medium term movements of your stock When the market is bullish, the price will be much higher than the MA, and when the market is bearish, the price will be much lower than the MA. In a choppy market, the price will stay close to the MA. The lesson here is the same as above – wait for the price t crossover the 20 DMA (either side) and then switch to a lower period 30M or 1 Hour to check if the trend indicated by the crossover continues (by watching the candles). You can check this on the NCC chart above. When the MA starts moving at a steep angle, it indicates buying frenzy (when it starts moving up steeply) or selling pressure (when it starts moving down steeply). A flat range translates into low volatility, and when a stocks start moving out of the flat period, it can explode on either side, as you can see from the chart below. If it does, then the stock can be considered for buying or selling. The lesson is watch the 1D chart first, wait for the price t crossover the 20 DMA (either side) and then switch to a lower period 30M or 1 Hour to check if the trend indicated by the crossover continues. Check how the 20 DMA indicates the movement. If the 20 EMA is heading downwards, it implies a bearish trend. If the 20 EMA is heading upwards, it implies a bullish trend. If the 20 EMA is flat, the stock is in a range. Many traders use the 20 EMA on 1D and 1W charts to determine the overall direction of the stock. Check and see how the price behaves when it violates the 10 EMA (the blue line): Here’s an example of a 1 Hour Chart of NCC Ltd. You can use this strategy for any period, but most traders use it on 5M, 15M, 30M and 1H charts. ![]()
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