Stock Market for Beginners

The stock market has continued to be extremely volatile and the bears have taken control in the last two weeks. You can see the vast difference in volatility by comparing single-day movements between the run up from April to June and the wild fluctuations from June to August.

Stock Market Strategies for Beginners:

• Price has broken through support at both the previous high of 1461 as well as the 200-day moving average.
• Further support is not found until 1363.
• RSI shows weakness in the market by consistently hovering between the 30 and 50 levels. Look for an RSI of under 30 for an oversold condition. You can see that the last time the RSI fell under 30 in March, it was near a market bottom.

In general, I would be very cautious about entering the market right now. Technically speaking, there’s still a long ways to go before we find support. Fundamentally, the market still looks good, but it seems as if people are overreacting. Look to buy when the market shows improving strength and confirmation. Remember that in today’s volatile markets, it’s essential to practice solid risk management strategies.

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