Why a rising moving average indicates an upward trend

Reference no: EM131231890

a. Explain why a rising moving average indicates an upward trend and a falling moving average indicates a downward trend in stock prices.

b. Explain why there is a lag between the time a trend reverses and when the moving average signals this reversal. Why is this lag longer for a 200-day moving average than a 10-day moving average?

c. What problems are associated with an SMA that an EMA calculation is designed to overcome?

Reference no: EM131231890

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