I've done some reading on this here at stock charts http://stockcharts.com/education/IndicatorAnalysis/indic_movingAvg.html But it seems on the example that they gave was just a coincidence that the chart hit the MA lines perfectly. It was probably just a lucky combination of chart time frame and MA length period .... or does this really work... do you use it in your analysis?
You're partially correct. They used an optimal example. Also keep in mind that the 50 and 200-day averages are more closely followed compared to other time periods. That gives them more "significance" as compared to the 70 and 150-day numbers.
=================== Cash; 50 and 200 are worth watching; 20 can be helpful also . Also note theyre called averages, , not precision pin points. And helpful to factor in seasonals, sectors, even a helpful average like 50 period should be viewed in that context.
What are so important about 50 and 20 MA?... Should the length of the MA's have anything to do with my holding period and the type of chart I display them on?