200 Day EMA of Nifty and Nifty-50 Stocks

200 Day Exponential Moving Average(EMA), is an important indicator in technical analysis. The 200 Day EMA is a long term moving average that helps determine overall strength of an index or a stock. It is generally used as a trend following indicator, which do not predicts market direction, but rather gives an idea about the current direction.

Why is 200 Day Moving Average important?

An index that is trading below its 200 DMA is considered to be in a long term downtrend and when it is above, it is in an uptrend. Whenever the index or a stock trades near these averages, they attract support in a bull market and finds resistance in a bear market. Currently, the 200 Day EMA of Nifty is around 9500 and the index Nifty 50 is around 10,450, which is good 1000 points above the 200-day EMA.

The following table may be of helpful, which shows the 200 DEMA and the current market prices of the Nifty and Nifty-50 stocks. These levels for the nifty index and stocks can be used as an guide to decide the major trend of the index or the stocks. Hence watch out these levels to make your trading decisions better.

If fact, the 200-day moving average may act as support or resistance simply because it is so widely used. It is almost like a self-fulfilling prophecy. The advantage of using moving averages is they are trend following and these indicators are always lagging, This lag factor not necessarily be construed as a disadvantage, but can be used viewed as a supportive factor to identify that whether a trader is line with the current trend or not.

For a trader, trend is your friend, isn’t it?

Historical Sensex Returns Updated - 2024

Historically Sensex has given returns of about 15% per year, despite volatility and price fluctuations of about -20% to +60%. The following table shows S&P BSE Sensex historical data - start & close values and the yearly returns of the sensex from 2000 to 2024. So far during the year the index has hit an all-time high of 75,124 and despite markets hitting all time highs not all stocks make all-time highs. There are many stocks still below their highs. Stocks like HDFC Bank, ITC, Asian paints are still well below their highs and some of them have given low returns over last 3-5 years. Individual or Retail investors can achieve consistent returns through investing via mutual funds , whether it be active or passive. Chasing returns from individual stocks is futile. Be a wise investor !

Historical BSE Sensex returns - updated 2013

We have already seen the historical returns of the BSE Sensex, which indicated an average return of about 20% per year, despite many yearly returns varying from -20% to +60%. The following table shows BSE Sensex historical data - open, close and the yearly returns of the sensex from 2000 to 2012. There are some interesting points to note from the above table. Post 2008 crash of about 50% and 2011 negative returns of 24%, markets have given positive returns of 81% and 25%. Also the average returns for the past years is about 20% despite the markets being down 24%. The lesson is pretty much clear - long term investing pays and one need not bother too much about the ups and downs of the markets. During the past few years, the returns from investing in individual stocks have been varied. Despite markets being at 2 year highs, only a few stocks are at similar highs, while most of them are still languishing well below their historical highs and are down anywhere ...

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