21st May 2022

Moving average breakout screener – 200dma, 100dma , 50dma

What is moving average?

A moving average indicator informs traders and investors about the price trends in the stock market. The two basic uses of moving average are to regulate the trend direction and determine the levels of support and resistance.

moving average crossover

A moving average indicator informs traders and investors about the price trends in the stock market. The two basic uses of moving average are to regulate the trend direction and determine the levels of support and resistance. In the moving average, the prices of stocks vary every now and then and this average is calculated every time there is a change in the prices.

Types of moving averages

There are two types of moving averages which are

  1. Simple Moving Average (SMA) or DMA
  2. Exponential Moving Average (EMA)

Moving average formula

The simple moving average formula to calculated by taking a set of prices in the case of financial instruments, which are added together and then divided by the number of prices in the set. 

   SMA= (A1+A2+A3+...+An)/n

The exponential moving average can be calculated using the formula below

   EMA(current) = ( (Price(current) - EMA(previous) ) x Multiplier) + EMA(previous)

How to use a Moving average crossover screener?

The Moving average crossover screener is used to understand whether any moving average breakout or breakdowns happened in the market hours today. This feature shows important moving average crossovers (breakouts and breakdowns) for the stock at end of the day.

The data provided on a moving average crossover screener is Symbol, 200DMA (200 DMA positive breakout & 200 DMA breakdown, 100 DMA, 50 DMA, 20 DMA & Pivot point Crossed.

Stocks breaking out of 200 DMA (Daily Moving Average) or 200 SMA are important candidates for swing trading or Intraday trading in the next few days. Other important Moving averages to watch out for Swing trades are 100 SMA, 50 SMA and 20 EMA