Technical Analysis of Moving Averages | CFA® Level 1 Exam Preparation

50-Day Moving Average vs. 200-Day Moving Average | CFA® Level 1 Exam

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Question

If the 50-day moving average line is above the 200-day moving average line but not by a large amount, technical analysts would consider this ________.

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A. B. C. D.

C

Since a 50-day average reflects more recent events than the 200-day average, its rise above the 200-day average is interpreted as a bullish signal. However, if the gap gets too large, then the technician might consider the stock to be over-bought and infer that the stock price is about to fall.

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