Moving Average

Moving Average - MA

An indicator frequently used in technical analysis showing the average value of a security's price over a set period. Moving averages are generally used to measure momentum and define areas of possible support and resistance.

Investopedia Commentary

Moving averages are used to emphasize the direction of a trend and to smooth out price and volume fluctuations, or "noise", that can confuse interpretation. Typically, upward momentum is confirmed when a short-term average (e.g.15-day) crosses above a longer-term average (e.g. 50-day). Downward momentum is confirmed when a short-term average crosses below a long-term average.

Related Links

Basics of Moving Averages
Moving Averages Tutorial
Introduction To Technical Analysis

See also: Average Price, Exponential Moving Average - EMA, Indicator, Mean, Momentum, Moving Average Chart, Resistance, Simple Moving Average - SMA, Support, Technical Analysis

Also spelled: MA

moving average

A series of successive averages of a defined number of variables. As each new variable is included in calculating the average, the last variable of the series is deleted. Suppose a stock's price at the end of each of the last 6 months is $40, $44, $50, $48, $50, and $52. The 4-month moving average in the fifth month is: ($44 + $50 + $48 + $50)/4, or $48. At the end of the sixth month, the 4-month moving average is ($50 + $48 + $50 + $52)/4, or $50. Technical analysts frequently use moving averages to discover trends in stock prices. See also 200-day moving average.