Expert: Paul Henneman - 1/16/2007

Question
Hello:

I understand that one technique used to determine whether on not to sell a stock is to sell when it falls below its 50-day moving average. Is the chart duration for this 50-day moving average on a daily chart or some other chart with a different time frame?

I thank you for your reply.

Answer
Thank you for your question!
  Yes, you are correct that many traders place a strong importance on the moving average. I would suggest visiting www.stockcharts.com, they show both the 50 day and 200 day moving averages for any ticker symbol you enter. I am not quite sure what you mean by 'chart duration'. The 50 day moving average is based on the past 50 days of stock price movement, so that can be displayed on a daily, weekly, or monthly chart. Really any time frame can be used that shows the trailing 50 day moving average. Because it is a rolling average, always using the prior 50 days, you are not limited to viewing only a 50 day history. A chart showing any length of historical pricing could theoretically show the historical 50 day moving average as well.
I hope this helps! Please do not hesitate to follow up with me if I can be of any further service,

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com