Technicals
Moving Averages
A moving average is the average closing price over a chosen window, a smoothed line through the noise.
The 50-day and 200-day simple moving averages are the ones investors actually mention. Price above a rising 200-day average is the plain definition of an uptrend. Price below a falling 200-day is a downtrend. The average does not predict. It summarizes where the market has been willing to transact.
An exponential average weights recent days more heavily, which is why MACD uses it. A simple average treats each day in the window equally. Neither is magic. They are useful because many participants watch the same windows, so the 200-day often behaves like a crowd-made reference point. Fundamental investors can use that reference to time adds, not to replace a view on the business.
Formula
Simple moving average = sum of the last N closes ÷ N
Live example
Apple Inc. (AAPL) last printed at $345.33 with a market cap of $5.04T. Apply the formula on this page to that live price. Where the quote is missing an input, the stock page's financials are the next place to read it.
Related
Golden Cross · Death Cross · MACD
See it on a list: best stocks · screener
Questions
50-day or 200-day?
200-day for the primary trend, 50-day for the intermediate trend. Shorter averages are for traders who can watch the screen.
Do averages work on every stock?
They work as arithmetic on any price series. They 'work' as signals only when other people trade them and the trend is real.