Moving Average

A moving average is the average price of a stock over a set number of recent days, recalculated daily as new prices come in. Think of it as a smoothed-out trend line that filters out daily noise to show you the bigger picture. You'll see moving averages everywhere in stock charts because they help traders spot whether a stock is trending up or down. For example, if TechCorp's 50-day moving average is climbing while the stock bounces around, that suggests upward momentum. The longer the timeframe (like 200 days versus 20 days), the smoother the line—short-term moving averages react faster to price changes, while long-term ones show the overall direction.