Technical analysis · updated October 21, 2026
What is the 50-day and 200-day moving average
A moving average is the stock's average price over the last N trading days, recalculated every day. It smooths out daily moves and shows the trend: the 50-day average for the medium term, the 200-day for the long term.
Moving average formula
- N
- The number of days: 50 for the medium term, 200 for the long term.
- Closing price
- The price at the end of each trading day.
Worked example
The closing prices for the last 5 days were $10, $11, $12, $11 and $13.
Tomorrow, the oldest price drops out and the new one comes in: that is why it is called moving.
How to read moving average
Many investors check whether the price is above the 200-day average: on our pages you see it as "Above the 200-day average".
When moving average can fool you
It lags: the average follows the price, it does not predict it. In a market with no direction, the price crosses above and below the average often, for no reason.
Related terms
Questions about moving average
Why 50 and 200 days?
They are conventions most investors use: 50 days is about two and a half months of trading, 200 days almost a year.
These explanations are for information only. They are not a recommendation to buy or sell.
Back to the glossary