Moving Average
Definition
An indicator that smooths price data by calculating the average price over a specified number of periods.
Explanation
Simple moving average (SMA) weights all periods equally. Exponential moving average (EMA) weights recent periods more heavily, reacting faster to price changes. Common periods: 50-day (medium-term trend), 200-day (long-term trend). The 'golden cross' (50-day crossing above 200-day) is a bullish signal; the 'death cross' (50-day crossing below) is bearish. Moving averages work as dynamic support and resistance levels — in uptrends, pullbacks often find support at the 50-day or 200-day moving average.
How Stoquity Uses This
Stoquity incorporates moving average analysis across its portfolio management platform, providing real-time monitoring and AI-powered insights for every portfolio.