Moving Averages Analysis
The article describes using moving average in technical analysis to predict possible future stock trend direction as well as discusses several technical indicators based on the moving averages. Moving average is one of the basic and most popular indicators in technical analysis. From the name of this indicator you may already understand that this indicator shows the average price of a security (stock, option, bond, etc) over specified period of time or specified period of bars. There are two most used types of moving average: Simple Moving Average (short name SMA) and Exponential Moving Average (short name EMA). The difference between simple and exponential moving averages is that exponential one uses weighing factors to reduce the lag in simple MA. The purpose of moving average is to smooth shorter-term price fluctuation within the longer-term trend in order to define the direction of the current longer-term trend. This technical indicator is one of the oldest in technical analysis...