What is Moving Average?
The average price of a stock over a rolling window of time.
Formal Definition
A moving average smooths price data by averaging it over a trailing window, such as 50 or 200 days, updating as new prices arrive. Simple and exponential variants are used to identify trend direction and dynamic support and resistance. Crossovers, like a 50-day rising above a 200-day (a golden cross), are common technical signals.
In Simple Terms
It is a smoothed line that averages out the daily noise so you can see a stock's underlying trend. When price sits above a rising average, the trend is generally up.
Example
When a stock's 50-day moving average crosses above its 200-day moving average, chartists call it a bullish golden cross.