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SMA 100

SMA 100

SMA 100 is a slower moving average that reflects the intermediate trend over roughly 100 periods.

The 100-day Simple Moving Average (SMA-100) calculates the arithmetic mean of closing prices over the most recent 100 trading days, representing approximately five months of trading activity. This intermediate-to-long-term indicator bridges the gap between the popular SMA-50 and SMA-200, providing another perspective on medium-term trend analysis.

The calculation:

SMA-100 = Sum of last 100 closing prices / 100

Why SMA-100 matters:

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  • Medium-term trend: Shows price direction over approximately one quarter
  • Additional perspective: Fills gap between SMA-50 and SMA-200
  • Support/resistance: Can act as significant price level
  • Trend confirmation: Helps confirm signals from other moving averages

    • Interpreting SMA-100:

    • Price above SMA-100: Medium-term uptrend intact
    • Price below SMA-100: Medium-term downtrend in place
    • Rising SMA-100: Sustained positive momentum over several months
    • Flattening SMA-100: Momentum slowing; possible trend change

    SMA-100 in the moving average hierarchy:

    • vs. SMA-50: Slower, smoother, less prone to whipsaws
    • vs. SMA-200: Faster, more responsive to recent changes
    • Between both: Useful when SMA-50 and SMA-200 give conflicting signals

    Trading applications:

    • Trend filter: Stay invested while price above SMA-100
    • Support testing: Watch for bounces off SMA-100 in uptrends
    • Breakdown signal: Break below SMA-100 may precede larger decline
    • Recovery signal: Reclaiming SMA-100 from below is bullish

    Multiple moving average analysis:

    • All aligned bullish: Price > SMA-50 > SMA-100 > SMA-200
    • All aligned bearish: Price < SMA-50 < SMA-100 < SMA-200
    • Mixed signals: Transition periods; exercise caution

    Limitations:

    • Less widely followed: Not as influential as SMA-50 or SMA-200
    • Significant lag: Slow to react to trend changes
    • False signals: Can still whipsaw in extended trading ranges

    SMA-100 provides valuable additional context in trend analysis. While not as universally followed as SMA-50 or SMA-200, it offers a useful intermediate viewpoint for investors seeking multiple confirmation levels.