#TrendTradingStrategy

Technical traders use moving averages for various types of price information:

Identifying trend direction. If the moving average is upward, the stock is likely in an upward trend. If it is downward, it is likely in a downward trend. If it fluctuates without a clear direction, the market is likely to be choppy (sideways).

Reducing market noise. Moving averages highlight overall trends while smoothing out short-term price fluctuations.

Looking for support and resistance levels. Some moving averages, such as the 50-day and 200-day moving averages, are important psychological levels that traders see as barriers to further market movement.

Therefore, the bullish market may face selling pressure ("resistance") at a key moving average; while the bearish market may find buyers "supporting it" at one of these moving averages.