Market Timing Strategy of Buying Stocks

A successful timing strategy will make good returns and exit losses quickly. This requires an investor to know when to buy and sell the stocks in the market. It is very common that investors like to use spreadsheets, charts, and graphs to analyze and find the right timing for buying stocks.

There are market timing strategies that work! Market timing often looks at various moving averages such as the 50- and 200-day moving averages, two of the most widely used indicators.

The 200 Day Moving Average is a long term measure that helps determine the overall health of a stock. A stock that trades below its 200-day moving average is deemed to be in a long-term downtrend and is considered as unhealthy. The concept is fairly simple: it is considered a buy signal when the 50 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 long-term uptrend and is generally considered to be a healthy indication. In other words, a healthy stock will generally see a rising 200-day moving average.

If the market has gone above the 50 and/or 200 day average that should be considered bullish, while below would be a bearish signal.

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