Therefore, one should look for other support levels and price action along with some understanding of fundamentals,” he said. “200-EMA alone can't help you to get the right trend because sometimes many stocks fall below their 200-EMA if there is a sharp correction in the market.
“Technically, 200-EMA is a very critical support level because most institutional investors like to accumulate their favorite shares around this level therefore we see a strong bounce back in any stock around this level,” Santosh Meena, head of research, Swastika Investmart Ltd, said. Theoretically, if the price close below 200 EMA is considered a bearish trend and a price close above 200 EMA is considered a bullish trend, but investors should use other indicators as well before making a buy or a sell decision. The 200-day EMA is considered a key indicator used by traders for determining overall market trends. Stocks that are trading below the crucial long-term average include names like HDFC Bank, HUL, HDFC Ltd, Kotak Mahindra Bank, ITC, Axis Bank, Adani Ports, and HDFC Life Insurance etc., among others.Įxponential Moving Averages (EMA) are used as indicators for long-term trends.
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