Reblog: 50 Day crossover study
Homeserve weekly chart
I’m on holiday in Cornwall for a few days having completed a marathon yesterday in just under 4 hours, so I’m away from the charting software I use every day.
So, I thought I would share one of the charts I’ve used previously and just talk a little bit about one of the indicators that’s a really simple one to follow but actually when user with other indicators can be really very strong.
Take a look at the 50-day line in black and the 200-day line in orange and see how they can influence a profit from September 2014.
See around October 2014 the 50-day crossed the 200-day average at around £3.50 per share and you don’t see the 50-day drop under the 200-day until about a year later at £4.25 giving a tidy profit over 12 months.
Wait then until May 2016 and the 50-day once again crosses over the 200-day average at around the £4.30 per share mark. This time you wait until March 17 where the price this time crosses at £5.75, this time you get an even better return in a shorter time frame,
Finally, on this chart look at May 17 where the price sits around £5.75, the 50-day average once again crossed up over the 200-day average. We await the 50-day crossing back under the 50 day!!
This chart is a perfect example where just following one simple criterion could do you well! Of course, you will want to combine this with other indicators but sometimes keeping things simple can be the best thing.
The original article is written by Ian Bourne and appears on www.bournetotrade.com. It is available here.