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How to Use the 50 and 200-Day Moving Averages

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  • (1:45) - What Is A Moving Average And How To Use It?
  • (12:00) - Breaking Down Nvidia’s Stock Charting Using Moving Averages
  • (24:30) - Using Darvas Box Theory To Find The Right Time To Invest
  • (28:40) - Golden Cross vs Death Cross: Are They Helpful To Identify Investing Trends?
  • (37:10) - Using Moving Averages For Stocks On A Strong Run
  • (46:20) - Episode Roundup:NVDA, ELF, DIS, WBBA, CTAS, CVX, XLE, IWM, SPY


Welcome to Episode #375 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.

This week, Tracey is joined by Zacks Stock Strategist David Bartosiak, who is also the editor of Zacks Surprise Trader and Blockchain Innovator portfolios, to discuss how to use the 50 and 200-day moving averages when investing or trading.

What are the 50 and 200-day moving averages? And why should you use them?

Dave covers the basics, using the Zacks website and its charts, to show how you, too, can create your own charts using these moving averages. And then he and Tracey take a look at a bunch of stocks, and the major indexes, to see the 50 and 200-day moving averages in action.

5 Stocks and Their Charts

1.      NVIDIA Corp. (NVDA - Free Report)

NVIDIA is on everyone’s lips right now. Shares are up 187% year-to-date and revenue is soaring. But NVIDIA’s shares have had a pullback in September, falling 8.9% over the last month.

NVIDIA has been trading above the 200-day moving average for months.

Is this a buying opportunity or does the chart indicate NVIDIA is expected to fall further?

2.      e.l.f. Beauty, Inc. (ELF - Free Report)

e.l.f. Beauty has been a big winner in 2023. Shares of e.l.f. Beauty are up 97.6% year-to-date but have pulled back in the last month. Shares are down 9.4% during that time.

But what do the 50 and 200-day moving averages tell us about the stock? Are they signaling that there may be more selling to come in e.l.f. Beauty?

Or is the bullish trend still intact?

3.      Walt Disney Co. (DIS - Free Report)

Disney shares have been under pressure. Over the last 2 years, shares of Disney have fallen 54.5%. In 2023, however, they’re down “only” 7.9%. But, Disney is now trading at multi-year lows.

How do you use the moving averages on a stock like Disney which hasn’t been going up, but has been going down?

4.      Walgreens Boots Alliance, Inc. (WBA - Free Report)

Walgreens Boots Alliance has had a tough 2023. It’s shares are down 43.4% year-to-date and the CEO recently left. Shares are at multi-year lows.

Walgreens Boots is a dividend aristocrat. It has raised its dividend every year for over 25 years. With the shares falling, it now has a dividend yielding 9%.

Does Walgreens Boots’ 50 and 200 day moving averages give traders any hope that the selling will end soon?

5.      Cintas Corp. (CTAS - Free Report)

Cintas reported its fiscal first quarter 2024 results on Sep 26, 2023. It beat and raised full year guidance. The uniform company has been a big winner the last 5 years. Cintas is up 120% during that time.

Cintas isn’t cheap, as it trades with a forward P/E of 35.

Do the 50 and 200-day moving averages provide traders with any clues about what might come next for Cintas shares?

What Else do you Need to Know About Stock Charts and 50 and 200-Day Moving Averages?  

Tune into this week’s podcast to find out.

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