Moving Average
Definition
An indicator that smooths price data by averaging prices over a specified period.
Detailed Explanation
A moving average (MA) calculates the average price over a set number of periods, creating a smooth line that filters out noise. Common periods: 20 MA (short-term), 50 MA (medium-term), 200 MA (long-term). Price above MA = bullish; below = bearish. MAs act as dynamic support/resistance. The 50/200 MA crossover ('golden cross' or 'death cross') is a widely followed signal. Simple MA (SMA) weights all prices equally; Exponential MA (EMA) weights recent prices more.
Example
NVDA trades above its rising 50-day MA, which acts as dynamic support on pullbacks. Buying dips to the 50 MA is a common strategy.