Question 38—A Stock Below Its Moving Average
Answer 1 A and D
A moving average represents an average consensus of value. It indicates the level of value in the current market, and its slope shows whether that value is increasing or declining. Nothing is definite in the stock market (except for commissions, slippage, and the fact that an unprepared trader will suffer losses). When the indicators are bullish and price is below the EMA, that EMA becomes the first target for a rally.
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