Technical
What is Moving Average (SMA)?
The average closing price over a fixed number of trading days, recalculated daily as the window rolls forward. It smooths out day-to-day noise to reveal the underlying trend.
Formula
SMA = Sum of closing prices over N days Γ· N
How to Interpret
Price above a rising SMA suggests an uptrend; below a falling one, a downtrend. Crossovers between SMAs of different lengths (e.g. 50-day crossing the 200-day) are classic trend-change signals. SMAs lag by construction β roughly half the window β and generate false crossovers in sideways markets.
Typical Ranges
Common periods: 10, 20, 50, 100, 200 days. The 200-day SMA is the most-watched proxy for the long-term trend; 10- and 20-day track short-term direction.
Find Stocks Using This Signal
Screen US and Indian stocks by Moving Average in the Technical Screener.