look at a 500 day moving average. if the security, assuming nothing fundamental has changed, is priced way above that line, like in this case 36, dang it, it will come down. If it is well below, it will come up.
I am self employed and try to stay working all the time. I need a simple thumbnail system. this could be it....
So what would you do with that information....ie, how high is high and how much below is low? Instead just take a 28 day MA with a 3 month chart. Every time the PPS crosses buy or sell. You would have gotten out near the highs and will buy again near the lows. The longer dated MA tells you nothing about getting out(when).
Thanks I'll try that. My fault here that I got in at 36, which by any lights was the peak of a run up with no corroborating change in fundamentals i.e.increased earnings, favorable environment, etc.
What I hope the longer MA on a security I'm interested in shows is irrational high or low points, the fear/greed swing, not so much buy or sell here or here, but rather DONT buy or sell here or here.
I generally buy to hold.
Simple. I'm not trading options, I'm buying to hold. I f I had looked at the 500 MA, I would have seen that 36 was way above that average price, for no real reason aka a bubble. Waiting for that bubble to pop would have been worth it. I am still holding in both my SEP and ROTH, with no complaints.