Many fund manager (even those based on fundamental analysis) use 200 day SMA as a guide. Obvious reason is because it is a simple tool which can "compliment" their complicated fundamental analysis.
Today, morning session close, FBM KLCI has close below the 200 day Simple Moving Average (see the chart below). .
200 day simple moving average (200-day SMA) is a simple technical analysis tool to determine major trend of the market. Moving average is formed by computing the average price of a security over a specific number of periods. When the index or price is below the moving average it is considered to be in a bearish trend
Many fund manager (even those based on fundamental analysis) use 200 day SMA as a guide. Obvious reason is because it is a simple tool which can "compliment" their complicated fundamental analysis. Also, the signal don't come often which is suitable for fund manager's longer term trade and portfolio reshuffling.
Many fund manager (even those based on fundamental analysis) use 200 day SMA as a guide. Obvious reason is because it is a simple tool which can "compliment" their complicated fundamental analysis. Also, the signal don't come often which is suitable for fund manager's longer term trade and portfolio reshuffling.
Note that moving average is the oldest technical indicator created. 200-day MA is good to determine overall market trend in a general way. Sometime it is use a support line indicator. However, it is (very) lagging indicator which mean the signals come too late for shorter-term traders. The opinion below is I think a good one.
On the surface, it seems as though the higher the 200-day moving average goes, the more bullish the market is (and the lower it goes, the more bearish). In practice, however, the reverse is true. Extremely high readings are a warning the market may soon reverse to the downside. High readings reveal that traders are far too optimistic. When this occurs, fresh new buyers are often few and far between. Meanwhile, very low readings signify the reverse; the bears are in the ascendancy and a bottom is near. source: internet
Below: FBM KLCI daily chart. Yellow line is 200-day SMA and Blue line is 200-day EMA. The last bar (today) is for morning session only.
