Introduction

• The strategy we will be implementing today is  the Exponential moving average (EMA)
• A buy or sell signal is triggered when the two averages cross
• EMA is a moving average that gives more weight and importance to the most recent data points
• The EMA focuses on recent price action. In other words, it tends to react faster to price changes than the SMA

EMA (exponential) Positive Crossover

• EMAs place a higher weighting on recent data than on older data, they are more reactive to the latest price changes  than SMAs
• When a shorter time period average (9 EMA) cuts the larger time period average (27 EMA) from below is a bullish crossover
• Let’s look at an example in the chart below (on TCS a  daily time frame)

• A buy signal is generated when the two moving averages cross each other Now that you know what an EMA  Positive crossover is, let’s look at a few opportunities in the LIVE market:  in 3 sectors IT, Pharma & AUTO

 EMA ( exponential)  Negative Crossover

• An exponential moving average (EMA) is similar to a simple moving average (SMA), which measures the direction of a trend over a period of time. However, while the SMA only calculates the average of the price data, the EMA applies more weight to more current data. Due to its unique calculation, the EMA will follow the price more closely than the corresponding SMA
• When the higher time period average (27 EMA) crosses the lower time period average (9 EMA) from above is a bearish crossover
• Let’s look at an example in the chart below (on DIVI lab a daily time frame)

• Now that you know what an EMA  a Negative crossover is, let’s look at a few opportunities in the LIVE market in 3 sectors IT, Pharma& Auto

Awesome, but what’s my takeaway?

• SUNPHARMA, M&M, TCS, BPCL & HCLTECH  have given a buy call on a daily time frame (implementing EMA  Positive crossover)
• DIVISLAB, HEROMOTOCO, BRITANNIA, TATACONSUM & GRASIM have given a sell call on a daily time frame (implementing EMA Negative Crossover)