Glossary · Technical Analysis
Moving average (MA)
The average price over a set number of periods, used to smooth trends.
A moving average plots the average closing price over N periods — such as 20 or 200 days — so noisy day-to-day swings soften into a smoother line. Simple moving averages (SMA) weight each period equally; exponential moving averages (EMA) weight recent prices more.
Traders use MAs as trend filters (price above a rising MA), dynamic support/resistance, and crossover signals. They lag by design: smoothing means they react after price has already moved.
Example
If a stock’s 50-day moving average is sloping up and price keeps holding above it, many traders describe the intermediate trend as bullish.