Regarding 10, 18 & 50 day MVA. Why do you measure on this reference, with MVA's, why not, 15, 23, and 55 MVA's or 20, 28, & 60 MVA's. Why does it have to be these particular days? (June 23, 2003)
When looking at the market we learned the hard way to watch what the market was telling you and then react accordingly. No matter how smart I thought I was about the market and started feeling certain that something had to happen, the market always seemed to show me no, it did not have to happen. When looking at support and resistance levels at certain periods in a stock's life I realized that the 10, 12, 18 and 20 day MVA often acted as support when a stock was trending higher after a breakout. Over the years the levels ebb and flow depending upon the market, but over the last several year the majority of the stocks that trend higher after a breakout utilize the 10 and 18 day MVA as support when they pullback in their continuing uptrend. Some stocks will use the 20 day MVA, and we always run that MVA on one of our chart layouts just to keep an eye on it.
The point is that we use what the market (and thus the big money) is using. If it changes we will change with it. The key here is to follow what the big guys are doing because they move the market, and when they come to the table at certain levels, that is when we want to come to the table as well.
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