So here is my question, if price is trading below the 50 day moving average, and rises and hits it, what is the correct action to take? Thanks!
How long has it been there? What is the daily trend? What is the weekly trend? Is there any news? I could go on and on and on and on........
you have to look to the left and see where price is, are you at major resistance with the 50 or are you coming off a bounce off the 200ma and going to run right thru the 50ma , was the trend up right before the pullback thru the 50, you need to look at the over all picture or you'll get killed just tradding mas
example http://i16.tinypic.com/2usu1e9.gif if you had shorted this touch of the 50ma and didn't look at other things would it have ben good?
FWIW: The first couple of times it hits you "should" fade it. But, you need to know what the "peer group" stocks are doing as well. Checking for ATR with the individual stocks and keeping in mind that there are a lot of "pairs" traders watching and trading them as well. Without viewing peers, you can't really answer your basic premise (on technicals alone). My 2 cents Mr. Schey - come up and visit for a few days when you can. Rob Friesen will be here next week, along with Darren Clifford. Don
heres what would have happened http://i12.tinypic.com/455u6xc.gif the 50ma from the first chart is down in the part where the question is and a rally took price right thru