200-SMA Swing
Bounce

The 200-period SMA on the daily chart is the most-watched long-term support/resistance level in equities. Bounces off a rising 200-SMA in a long-term uptrend are among the high-quality swing setups available.

SwingDaily3:1 R:RConservativeEquities/ETFs
200-day
SMA Period
3:1
R:R
Deploy This Strategy See Rules

Rules & Configuration

The full rule set, required indicators, suggested configuration, execution flow, and performance parameters for the 200-SMA Swing Bounce setup.

The 200-period SMA on the daily chart is the most-watched long-term support/resistance level in equities. Bounces off a rising 200-SMA in a long-term uptrend are among the high-quality swing setups available.

Indicators Used
SMA 200RSIVolume
Rules
📈 Long Bounce Entry
  • Daily SMA 200 must be sloping upward (long-term uptrend)
  • Price has been above SMA 200 for at least 3 months
  • Pullback touches or slightly penetrates SMA 200
  • RSI(14) between 30-40 (oversold but not extreme)
  • Volume above 20-day average on the touch day
  • Enter long on bullish reversal candle close
  • Stop: 3-5% below SMA 200
  • Target: prior high, or trailing stop at 50-SMA
⚙️ Configuration
  • // 200-SMA Bounce Config
  • SMA period: 200 daily
  • Trend requirement: > 3 months above
  • RSI zone: 30-40 (oversold for uptrend)
  • Volume filter: > 20-day average
200-day
SMA Period
3:1
R:R
💡 Pro Tip

The 200-SMA is self-fulfilling. Institutions use it as a bias indicator. Bounces work because funds reallocate. BUT if the SMA is flat or declining, bounces fail. The entire thesis requires an established long-term uptrend.

Common questions

What is the 200-SMA Swing Bounce strategy?

The 200-period SMA on the daily chart is the most-watched long-term support/resistance level in equities. Bounces off a rising 200-SMA in a long-term uptrend are among the high-quality swing setups available.

What's the pro tip for trading 200-SMA Swing Bounce?

The 200-SMA is self-fulfilling. Institutions use it as a bias indicator. Bounces work because funds reallocate. BUT if the SMA is flat or declining, bounces fail. The entire thesis requires an established long-term uptrend.

What indicators does the 200-SMA Swing Bounce strategy use?

The 200-SMA Swing Bounce strategy uses the following indicators: SMA 200, RSI, Volume. These can be configured directly in AlgoBars AlgoBuilder.

What timeframe works best for 200-SMA Swing Bounce?

The 200-SMA Swing Bounce strategy is best traded on the Daily timeframe. This can be adjusted based on your trading style and market conditions.

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