Moving average is a technical indicator that smooths out price movements by calculating the average over a specific time period (e.g. 20, 50, or 200 days). This helps to better identify the trend direction and filter out short-term fluctuations. The most commonly used types are SMA (Simple Moving Average) and EMA (Exponential Moving Average). If the price is above the moving average, it usually indicates an uptrend – and vice versa.
Why moving averages?
In this context, we prefer the current price to be above the moving average, as it signals an upward trend in the stock. For swing trading, it is recommended to use the 50-day moving average, preferably the exponential moving average (EMA), which responds better to recent price changes. For identifying short-term trends, the 20-day moving average can also be used.
Answers and Score
| ANSWER | SCORE | PRIORITY |
| Yes – significantly above the moving average | 8 | 0,9 |
| Yes – slightly above the moving average | 10 | 0,9 |
| No – below the moving average | 5 | 0,9 |
| No – well below the moving average | 4 | 0,9 |
Where to find moving averages?
You can find a pullback in these charts. For example, on finviz.com or finance.yahoo.com
This question is part of this analyzer.
| Decameron Stock Analyzer – Swing trading, v.1.0 | open analyzer |
Do you want to know more?
Moving Averages: How to Use Them in Trading and Swing Trading
.){kind=link}