Despite an ugly weekly decline for the Dow Jones Industrial Average, the blue-chip gauge has risen so far and so fast that it would require a roughly 900-point drop to push it below its 50-day moving average. The Dow presently sits at around 25,898, down about 278 points, or 1.1%, with a weekly decline of about 700 points or about 2.5%, representing its worst drop over such a period since Jan 8, 2016, according to FactSet data. However, the equity gauge would need to slump to 25,023.91, a decline of 886 points, of about 3.4%, from its current level. In order to slump under its longer-term, 200-day moving average it would need to plunge to 22,704, or a whopping 3,200 points, a drop of about 12%. Similarly, the S&P 500 index , which also is having a challenging week, after a stellar January, would require an 82.51 slump, or 3%, to hit its 50-day MA at 2,715, with it would need to tumble 265 points, or 9.5%, to reach its 200-day MA at 2,532. Market technicians look at short-term and long-term moving averages partly to gauge momentum in an asset.
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From:: Stock Market News