MA Support and Resistance Levels

MAs can be used as points of support and resistance on stocks charts.

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

Buy Signal

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

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

A stoploss should be set just below the Moving Average stocks Indicator. Ideally it should be set a few pips below the previous low.

Buy Signal - How to Trade Stocks with Moving Average Method

Sell Signal

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

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

A stoploss should be set just above the stocks moving average indicator. Ideally it should be set a few pips above the previous high.

Sell Signal - How to Trade Stocks with Moving Average Method

Resistance Level turns Support Level

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

This happens when the fundamentals of a trend change and consequently the direction of a stocks. Direction change is reflected by the moving average stocks indicator, the direction is confirmed when resistance zone turns into support area or vice versa (when support level turns into resistance level)

Resistance Level turns Support Level - Moving Average Stocks Strategy Example