What is the primary function of a moving average (MA) in stock market analysis?

Predicting short-term market volatility Identifying long-term investment opportunities Analyzing trends and potential future price movements Determining the intrinsic value of a company

Which of the following statements accurately describes the relationship between moving average period length and its responsiveness to price changes?

Longer MA periods are more sensitive to price fluctuations Shorter MA periods provide a more stable view of price trends Longer MA periods result in a more reactive indicator Shorter MA periods are less sensitive to price changes

How does the exponential moving average (EMA) differ from the simple moving average (SMA)?

EMA gives equal weight to all prices within the period, while SMA prioritizes recent prices EMA focuses on the opening prices, while SMA considers closing prices EMA assigns greater weight to recent prices, while SMA weights all prices equally EMA is used for short-term analysis, while SMA is suitable for long-term trends

In the context of moving averages, what does a 'crossover' signify?

A change in the overall market sentiment The point where one MA intersects another A period of high market volatility A significant shift in a company's financial performance

According to the 200-day moving average strategy, what does it indicate if a stock price is consistently above its 200-day MA?

The stock is likely overvalued and should be sold The stock is experiencing a bearish trend The stock is potentially a good investment opportunity The stock is highly volatile and risky