SMA (Simple Moving Average)

A Simple Moving Average (SMA) is the average price of a stock over a set 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—traders use them to spot trends and smooth out daily price noise. If a stock's price is above its 50-day SMA, that's often seen as a bullish sign (prices trending up); below it, bearish (trending down). Think of it like a trend line that follows the stock: it lags behind real-time prices but helps you see the bigger picture instead of getting distracted by random daily wiggles.