How to Use Moving Averages When the Market Keeps Rising

A practical way to read price trends and stay aligned with your investment strategy

Markets Are Up. Now What?

The S&P 500 is trending higher and investor sentiment is cautiously optimistic.

But recent data shows the rally is being driven by fewer stocks.

Large caps in tech and AI are still strong, but other areas—like small caps and value—have begun to lag.

This is a good time to revisit how you’re managing exposure, especially if most of your gains are coming from just a few names.

Why Trend Awareness Matters

Moving averages are not forecasting tools.

But they’re one of the simplest ways to understand how prices are behaving relative to their recent history.

Used correctly, they can show you whether a position is trending higher, consolidating, or starting to weaken.

They also help reduce overreaction—by giving you something objective to measure against.

In volatile or momentum-driven environments, this context becomes especially useful.

What to Do With This Information

• Use the 50-day moving average as a trend check
  When prices stay above the 50-day, it’s generally a sign that the short-term trend is intact. A break below may signal a slowing trend—not necessarily a sell, but worth reviewing.
• Pair the 200-day moving average with your long-term holdings
  This longer average helps confirm whether a stock or ETF is still aligned with a durable trend. If prices stay well above it, the long-term uptrend is likely still intact.
• Use moving averages to inform—not dictate—rebalancing
  If a position has extended far above its moving average, it may be contributing to portfolio drift. Rebalancing can bring your allocation back in line without needing to time a top.
• Compare sectors or styles using their respective averages
  Tech and growth stocks are still strong, but many defensive and value sectors are beginning to firm up. A moving average crossover can hint at early rotation.
• Avoid using moving averages in isolation
  They work best when combined with your investment thesis. A price crossing below a moving average isn’t a sell signal unless the fundamentals have also changed.

A Question to Sit With

Do you know which of your holdings are trending—and which are simply holding on?

The Takeaway

Moving averages won’t replace strategy.

But they can help support it.

They offer structure when markets are unclear, and a way to check if momentum is still in your favor.

In rising markets, that’s often enough.

It’s not about predicting what comes next.

It’s about staying aligned with where things are now.

Strategies Worth Watching

Riding the Ripple Effect

When one stock in a sector moves, others often follow.

That’s the idea behind sympathy trading—and when used well, it can be a powerful edge during earnings season.

This short video tutorial breaks down how to spot these ripple effects in real time.

It walks through how a move in J.P. Morgan can set up trades in other bank stocks—and why some sectors (like oil and gas) work better than others.

What you’ll take away:
✅ How to identify reliable sympathy setups by sector
✅ The difference between leading and lagging stocks
✅ Why tech and EVs don’t always follow the script
✅ How to avoid false signals and chase only conviction plays

If you want to learn how real traders build an edge with sector-level awareness, this is a great starting point.

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