What's the difference between 100 and 200 SMA?

<p id="isPasted">The main difference between a 100 Simple Moving Average (SMA) and a 200 SMA lies in the period they consider for calculating the average price. The 100 SMA averages the price over the last 100 periods (days, hours, etc.), while the 200 SMA averages the price over the last 200 periods. This difference in period affects how sensitive they are to price changes and how they are used to identify trends.&nbsp;</p><p>Here's a more detailed breakdown:</p><p>100 SMA:</p><p>Sensitivity: Reacts more quickly to recent price changes due to the shorter period.&nbsp;</p><p>Trend Identification: Helps identify medium-term trends.&nbsp;</p><p>Support/Resistance: Can act as dynamic support or resistance levels, but may be less reliable than the 200 SMA for long-term trends.&nbsp;</p><p>Example: If a stock price crosses above its 100 SMA, it could suggest a medium-term uptrend.&nbsp;</p><p>200 SMA:</p><p>Sensitivity:</p><p>Slower to react to price changes due to the longer period, providing a smoother trend line.&nbsp;</p><p>Trend Identification:</p><p>Primarily used to identify long-term trends, both bullish and bearish.&nbsp;</p><p>Support/Resistance:</p><p>Often considered a stronger support or resistance level than the 100 SMA, especially for long-term investors.&nbsp;</p>

<p id="isPasted">The primary difference between the 100-day Simple Moving Average (SMA) and the 200-day SMA is the time period used in their calculation, which affects their responsiveness to price changes and their application in trading strategies.&nbsp;</p><ul><li id="isPasted">The 100-day SMA represents the average price over the last five months of trading (roughly 20 weeks). It provides a good gauge of the medium-term market direction and acts as a less significant, but still important, support/resistance level compared to the 200-day SMA.</li><li>The 200-day SMA represents the average price over the last year of trading (roughly 40 weeks). It is widely considered a highly significant technical indicator for determining the major, long-term trend of a security. It is a critical level that many large institutional investors watch closely, and price movements relative to it can signal major shifts in market sentiment (e.g., "golden crosses" or "death crosses"). </li></ul><p>Ultimately, the best SMA to use depends on an investor's trading style and objectives; shorter periods are suited for short-term analysis, while longer periods are for long-term perspectives.&nbsp;</p>