- May 2, 2014
- Posted by: essay
- Category: Term paper writing
The Moving Average Chart is very important, especially in the contemporary business and finance. Today, the Moving Average Chart has found multiple applications which are quite successful. At this point, it is possible to refer to using the Moving Average Chart to define the support level, in technical analysis and to define moving average in financial terms.
In fact, the Moving Average Chart helps to define the support level which is the price level, which a stock has difficulty failing below (Chowdhry and Howe, 195). The support level is the level at which a lot of buyers tend to enter the stock. In such a way, the Moving Average Chart helps investors to define when to start buying stocks, when they reach the target level.
In addition, Moving Average Chart is applied in technical analysis which is a method of evaluating securities by analyzing statistics generated by market activity, for instance, the past price and volume (Boneau, 51). The technical analysis helps to understand the development of the target company and to take a decision on whether to invest in this company or not.
Finally, the Moving Average Chart is often used to define moving average as an indicator which is frequently used in technical analysis showing the average value of security’s price over a set period (Carter, 151). The moving average helps to measure momentum and define areas of possible support or resistance. In such a way, the Moving Average Chart helps to focus on problem areas and areas which need improvement.
Thus, the Moving Average Chart helps to take decisions in the field of finance and conduct accurate financial analysis.