In the earlier part of the day today Sensex fell below its 200 day moving average, DMA, of 13950 levels. While majority of stocks fell below the 200 DMA today, there were few stocks that gave a positive breakout and moved above its simple moving average.
Some of them like Kernex Micro, Hind Dorr-Olive, Godavari Fert, Heritage Foods traded above their 200 days SMA by 74.04%, 22.43%, 6.74%, 6.98% respectively.
According to technical analysts, stocks that trade above their 200 days SMA, simple moving average, are technically stronger than the others that are trading below, as it indicates the willingness of the long term investors to hold or buy the share at those levels.
Explaining this, Technical Analyst, Vijay Bhambwani of BSPLindia, said, "200 days simple moving average indicates the willingness of the long term investors to hold or buy the share at those levels. Normally volatility is provided by the short-term players and those are weak hands. The 200 day SMA indicates where strong hands are present."
