Moving Average

The average price of a security over the previous days or years. For example, a 50-day moving average is the average price of a security over the past 50 days. This gives an indication of a security's price trend.

For people doing technical stock analysis, a 200-day moving average is a standard longer term measure, and often this is compared with a 50-day or even 5-day moving average in an effort to gain insight into the direction of a stock. When the short-term average moves above the long-term average, it's considered a buy signal. When the short-term average is below the long-term average, it's considered time to get out.

 

 

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