Moving average

The Market Financial  Jul 8  Comment 
This morning, leading technology and commerce stock Inc (NASDAQ:AMZN) is trading lower by 3.18 percent to $322.84 a share. Traders should take note that the stock has now cut through its important daily chart 20-day moving average. This...
The Market Financial  Jun 16  Comment 
This morning, leading apparel retailer Michael Kors Holdings LTD (NYSE:KORS) is trading lower by $2.64 to $91.23 a share. It should be noted that Michael Kors Holdings stock is now trading below the important 50-day moving average. This is an...
Market Intelligence Center  May 19  Comment 
S&P 500 has been on an unprecedented run for a while now. It recently reached a new record high at 1902.17. But with that new high, it created an evening star candlestick pattern, which signals a trend reversal. An evening star pattern is a three...
FX Street  Mar 31  Comment 
While the price of gold has fallen by almost $88 – or 6.3% – over last two weeks, we haven’t seen... For more information, read our latest forex news and reports.
FX Street  Mar 27  Comment 
Gold has extended its losses today. Over the past nine sessions, the yellow metal has only managed... For more information, read our latest forex news and reports.
The Economic Times  Mar 24  Comment 
US stocks fell sharply on Monday, with the Nasdaq marking its biggest daily percentage drop since early February.
The Economic Times  Feb 18  Comment 
"We are bang in the middle of the resistance zone of about 6,130-6,150 levels," Gujral said.
MarketWatch  Jan 28  Comment 
The 50-day moving average is one of the most widely-followed technical analysis tools. This break occurred late last week, so technicians are now worried. What does the historical data suggest?
Forbes  Jan 24  Comment 
Apple's shares have bounced off its 50 day moving average three times this month. This could provide meaningful support to the shares.
Forbes  Jan 6  Comment 
Apple's shares are just above its 50 day moving average and if they don't hold they could slump to $525.


A moving average is a smoothed-out trend line built from an underlying set of data - stock prices in the context of investing. The moving average is calculated by taking, for each point in time, the average values of the underlying data from the previous N timepoints. So, for example, the 10-day moving average for a stock price is the average price of the previous 10 days' closing prices for every given day. The average is said to be "moving" because the time period over which the average is calculated is always the previous ten days of data for each day, and therefore is different for each day.

Moving averages smooth out data over time, and technical traders believe they reveal an underlying trend in a security's price. By increasing "N" - IE, by looking at, for example, a 200 day moving average instead of a 10 day one, a trader would see a trend on a larger scale than with the 10-day moving average, but with decreased responsiveness - IE, only long after large changes in the stock price would the 200-day moving average start to tend in a new direction, given the weight of all the historical prices in the 200-day moving average.

Exponential moving averages give more weight to the latest data points in the moving average calculation, making them more responsive to recent changes in stock price.

Technical traders will look to the convergence or divergence of moving averages, known as MACD, with different periods (or values of "N") to indicate patterns of resistance or support which technical traders believe indicate where a stock price is likely to move in the future.

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