Moving Average Support and Resistance Levels

Moving Averages can be used as points of support and resistance on stock index charts.

When stock index price reaches the moving average, the Moving Average level can act as a point of support or resistance for the stock indices price.

Buy Stock Indices Signal

If stock index price is on an upward stock indices trend and starts to retrace, then most stock indices traders might wait to buy at a better stock index price when the stock index price hits a support level. Stock Indices Traders will sometimes use the Moving Average to determine the support level.

A buy stock indices signal is generated when stock index price hits the Moving Average, turns and starts moving in the upward stock indices trend direction. The stock indices signal is confirmed when stock index price closes above the Moving Average. Because many stock indices traders use the moving averages to generate stock indices signals, stock index price will normally react to these levels.

A stop loss should be set just below the Moving Average stock indices Indicator. Ideally it should be set a few pips below the previous low.

Buy Stock Indices Signal - How to Trade Stock Indices Trading with Moving Average Strategy

Sell Stock Indices Signal

If the stock index price is on a downward stock indices trend and starts to retrace, then most stock indices traders might wait to sell at a better stock index price when the stock index price hits a resistance level. Stock Indices Traders will sometimes use the Moving Average to determine the resistance level.

A sell stock indices signal is generated when stock index price hits the Moving Average, turns and starts moving in the downward stock indices trend direction. The stock indices signal is confirmed when stock index price closes below the Moving Average. Because many stock indices traders use the moving averages to generate stock indices signals, stock index price will normally react to these levels.

A stop loss should be set just above the stock indices moving average indicator. Ideally it should be set a few pips above the previous high.

Sell Stock Indices Signal - How to Trade Stock Indices Trading with Moving Average Strategy

Resistance Level turns Support Level

In Stock Index - When a resistance level is broken it turns into support and vice versa.

This happens when the fundamentals of a stock indices trend change and consequently the direction of a stock indices. The direction change is reflected by the moving average stock indices indicator, the direction is confirmed when the resistance turns into support or vice versa (when support turns into resistance)

Resistance Level turns Support Level - Moving Average Stock Indices Strategy Example