SMA (Simple Moving Average)

A Simple Moving Average (SMA) is the average price of a stock over a specific number of recent days. You calculate it by adding up the closing prices from, say, the last 50 days, then dividing by 50. You'll see SMAs everywhere in stock charts—they're one of the most popular tools traders use to spot trends. The main idea: a moving average smooths out daily price wiggles so you can see the bigger picture. If a stock's price is trading above its 200-day SMA, that's often seen as a bullish sign (prices trending up). If it dips below, some traders view it as bearish. Think of it like a trend line that updates every day—it helps you answer the simple question: "Is this stock generally going up or down?"