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Unstoppable Bulls Defend the 100-day SMA: A Show of Strength

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  • The AUD/JPY is currently trading at 96.32, recording a loss of 0.30%.
  • According to daily chart indicators, negative RSI trajectory and ascending red MACD histogram hint bearish momentum.
  • Hourly chart indicators imply bearish pressure has eased with a rebound in bulls evident in positive RSI slope and flat MACD bars.

In Monday’s session, the AUD/JPY pair lost ground, with a low of 96.32 following a previous high of 96.80 earlier in the day. On the fundamental side, markets await the Reserve Bank of Australia meeting on Tuesday where investors will look for clues for forward guidance which could set the pace of the cross for the week. The technical outlook for the pair remains neutral to bearish on the daily chart, although recent activity shows the bulls regaining some ground on the hourly chart.

AUD/JPY levels to watch

According to the daily chart, it is showing a neutral to bearish outlook. The negative territory and declining slope of the Relative Strength Index (RSI) indicates a bearish momentum. Simultaneously, the Moving Average Convergence Divergence (MACD) histogram showcases increasing sake of red bars which signals the short-term downward pressure. Nevertheless, despite the shorter-term momentum suggesting bearish sentiment, when looking at the Simple Moving Averages (SMAs), the pair is evidently below the 20-day SMA but bulls are presenting battle at the 100-day SMA and is still above the 200-day average. This indicates that in the larger picture, bulls maintain a stronghold.

Moving onto the shorter-term outlook given by the hourly chart, it presents a slightly different picture. On this timeframe, despite the bears taking a step back and allowing for some recovery, the bullish force is merely reflected as a retaliation rather than a comeback. The Relative Strength Index (RSI) although in negative territory, boasts a positive slope indicative of some bullish pushback. The Moving Average Convergence Divergence (MACD) echoes this sentiment with flat red bars. However, the buying momentum is not sufficient to negate the dominant selling sentiment, but it does put forth a pause in the bearish outlook of the session.

 

Unstoppable Bulls Defend the 100-day SMA: A Show of Strength

The stock market has been a rollercoaster ride for investors in recent times, with unpredictable twists and turns. However, amidst all the uncertainty and volatility, there is one indicator that has been a consistent source of support for the bulls – the 100-day Simple Moving Average (SMA). This moving average has proven to be a formidable barrier against market downturns and has acted as a powerful buffer for investors. In this article, we will take a closer look at what the 100-day SMA is, its significance in the stock market, and how it has defended the unstoppable bulls.

Understanding the 100-day Simple Moving Average (SMA)

The 100-day SMA is a widely used technical indicator in the stock market. It is calculated by taking the sum of the closing prices of a stock for the last 100 days and then dividing it by 100. This results in a smooth line that shows the average price of the stock over the past 100 days. This moving average is then plotted on a chart, along with the stock’s current price, to provide traders with valuable insights into the stock’s trend.

The 100-day SMA serves as a vital support level for many traders and investors. It is because the 100-day SMA is considered to be a significant threshold that separates short-term from long-term market trends. If the current price of a stock is above the 100-day SMA, then it is considered to be in an uptrend, while if it is below the 100-day SMA, then it is going through a downtrend. The 100-day SMA is used extensively by traders to identify potential buying or selling opportunities based on its relative position to the stock’s current price.

Importance of 100-day SMA in Stock Market Analysis

The 100-day SMA is one of the most widely used technical indicators in stock market analysis. Its popularity can be attributed to its simplicity, accuracy, and ability to capture long-term trends. It is also used by many traders as a confirmation tool for other technical indicators, such as the Relative Strength Index (RSI) or moving averages crossover signals.

One of the biggest advantages of using the 100-day SMA in stock market analysis is that it smoothens out the stock’s short-term fluctuations, providing a clearer picture of the overall trend. This moving average is also a reliable indicator of support or resistance levels, making it a go-to tool for traders to make informed decisions in their trading strategies. Traders also use the 100-day SMA to determine safe entry and exit points for their trades.

Unstoppable Bulls Defend the 100-day SMA

In recent times, the stock market has seen heightened volatility due to various factors, including the COVID-19 pandemic, oil price wars, and political uncertainties. However, amidst all this turmoil, one thing has remained consistent – the unstoppable bulls have defended the 100-day SMA with unwavering strength.

Since the beginning of 2020, the stock market has been on a wild ride, with major market indices, such as the S&P 500, experiencing significant drops due to pandemic-induced fears. However, despite these market dips, the bulls have maintained their stance and have rallied back above the 100-day SMA, displaying their resilience and determination.

The 100-day SMA has also proven to be a powerful support level for individual stocks. For example, Tesla, one of the hottest stocks in the market, has been able to bounce back above its 100-day SMA multiple times, even during significant market swings. This indicates that the bulls have been able to protect this moving average and use it as a launching pad for their next rally.

Benefits and Practical Tips for Traders

The 100-day SMA has been a valuable tool for traders, providing them with reliable signals and helping them navigate through market uncertainties. But what are the benefits and practical tips for traders when using the 100-day SMA?

1. Identify Market Trends: As mentioned earlier, the 100-day SMA serves as a clear separation of short-term and long-term market trends. By using this moving average, traders can quickly gauge the stock’s trend and adjust their trading strategy accordingly.

2. Use as a Confirmation Tool: The 100-day SMA can be used as a confirmation tool for other technical indicators, such as the RSI or moving averages crossover signals. By waiting for the confirmation of the 100-day SMA, traders can increase the accuracy of their trading decisions.

3. Set Entry and Exit Points: The 100-day SMA also serves as a reliable indicator of support and resistance levels, making it an ideal tool for traders to set their entry and exit points. By observing how the stock reacts to the 100-day SMA, traders can make informed decisions about their trades.

4. Combine with Other Indicators: The 100-day SMA works best when combined with other technical indicators. Traders can combine it with the 50-day SMA or other moving averages to get a clearer picture of the stock’s trend.

In Conclusion

In conclusion, the 100-day Simple Moving Average (SMA) has proven to be an essential tool for traders and investors in navigating the unpredictable stock market. Its consistent support of the unstoppable bulls has been a testament to its strength and reliability. By understanding the significance of the 100-day SMA and incorporating it into their trading strategies, traders can make informed decisions and stay ahead in the ever-changing stock market landscape.

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