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Averages 100 periods of closing prices, exposing the intermediate-to-long-term price trend after filtering out shorter fluctuations.
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:
- 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.