FactorSage

Technical Signals · Lesson 2.3

Price above SMA 200

A stock trading above its 200-day simple moving average is, by definition, above the average of its prices over roughly the last year. Many strategies treat that as a precondition for going long.

The rule

In the FactorSage strategy builder this is PRICE IS_ABOVE DAILY_SMA_200. It returns true on any day where the close is greater than the 200-day SMA value.

Why it works as a filter

  • It avoids buying stocks that are still in a sustained downtrend.
  • It is conservative — most false positives are stocks that simply do not pass the filter rather than bad trades.
  • It pairs naturally with a value rule: only buy cheap stocks that the market has already started rewarding.

Weekly variant

If you trade weekly rather than daily, WEEKLY_SMA_200 or EMA_200_WEEKLY provide the same idea on a smoother timeframe.

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