When a stock falls below its 200-day average
A close below the 200-day average is often read as the end of an uptrend. The figures below show what followed the first close below it in Indian stocks.
What it measures
The 200-day average is the average closing price over about ten months. Many investors treat it as a dividing line: above it, the long-term trend is up; below it, down.
How it is calculated
Add the last 200 closing prices and divide by 200. The event here is the first day the close drops below that line after being above it.
What happened next, in Indian stocks
These figures come from Sensifty’s monthly research and load here.
Why one crossing is noisy
Prices often dip below the average for a day or two and come back. A single crossing can be a turn, or just a wobble. That is why Sensifty only calls a downtrend after the price has stayed below the average for several sessions and the average itself has turned down.
What it does not tell you
The crossing describes the price against its own recent past. It does not tell you whether the company’s prospects have changed.
Related
Sensifty measures each of your stocks against its own history, and tells you once when a stretch cools off. Add to Chrome
Figures describe the past, among the 500 most traded NSE stocks at each date. They are not a forecast or a recommendation.