moving average

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Related to moving average: Weighted moving average

Moving average

Used in charts and technical analysis, the average of security or commodity prices constructed in a period as short as a few days or as long as several years and showing trends for the latest interval. As each new variable is included in calculating the average, the last variable of the series is deleted.

Moving Average

The average price of a security over a certain time period, calculated continuously. For instance, one may calculate a moving average by adding prices from the most recent trading days (for example, the last 10 days) and dividing by the number of trading days considered (in this case, 10). A moving average may or may not be weighted. Moving averages help smooth out noise that may be present in a security's price on a given trading day. See also: Simple Moving Average, Exponential Moving Average.

moving average

A series of successive averages of a defined number of variables. As each new variable is included in calculating the average, the last variable of the series is deleted. Suppose a stock's price at the end of each of the last 6 months is $40, $44, $50, $48, $50, and $52. The 4-month moving average in the fifth month is: ($44 + $50 + $48 + $50)/4, or $48. At the end of the sixth month, the 4-month moving average is ($50 + $48 + $50 + $52)/4, or $50. Technical analysts frequently use moving averages to discover trends in stock prices. See also 200-day moving average.

Moving average.

A moving average of securities prices is an average that is recomputed regularly by adding the most recent price and dropping the oldest one.

For example, if you looked at a 365-day moving average on the morning of June 30, the most recent price would be for June 29, and the oldest one would be for June 30 of the previous year.

The next day, the most recent price would be for June 30, and the oldest one for the previous July 1.

Investors may use the moving average of an individual security over a shorter period, such as 5, 10, or 30 days, to determine a good time to buy or sell that security.

For example, you might decide that a stock that is trading above its 10-day moving average is a good buy or that it's time to sell when a stock is trading below its 10-day moving average. The longer the time span, the less volatile the average will be.

moving average


moving average

References in periodicals archive ?
This is called <strong>convergence </strong>because the faster moving average is "converging" or getting closer to the slower moving average.
The exchange-traded fund (ETF) is currently pulling back to support at its ascending 20-day moving average, which has buoyed the shares since the end of August.
This pullback has occurred on heavy volume and is forcing the equity's 10-month and 20-month moving averages closer to a bearish crossover, the first of its kind since late 2002.
Boston Beer Company (NYSE:SAM) shares are now trading more than four percent lower and have slipped below their 50-day moving average.
From a longer-term perspective, the stock has consolidated into support at its ascending 10-month moving average, which has guided DJO higher since December 2004.
A short-lived rally in the shares recently petered out at the stock's descending 160-day moving average, which is now effectively acting as a ceiling against short-term upside in the security.
This area is not only home to the stock's 10-month moving average, but its 160-day trendline also resides in the region.