The S&P 500 is on a roll. It is moving steadily to reclaim its high for the year. Most of the market's optimism is from the expectations of a potential soft landing due to cooling growth. The continued optimism has also pushed some stocks into long-term bullish territory when they crossed their 200-day SMA. The 200-day SMA is perceived by traders and investors as a long-term indicator and the last line of defense when looking at its long-term trend, and when a stock crosses above it, it could signal that a new trend is emerging.
While some may argue that the 200-day SMA is a bullish signal and signals a change in trend, it's not always the case. Keeping a close watch on stocks that move above their 200-day SMA puts you in a position to take advantage of the opportunity when price action and buying pressure confirm the reversal of the market’s sentiment.
