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Glossary · PSX term

Moving average.

A moving average smooths a stock's price over a chosen period to reveal its trend.

Definition

By averaging recent closing prices, it filters out daily noise, and traders watch crossovers, like a short average crossing a longer one, as trend signals. It is a lagging indicator based on past prices.

Worked example

A 50-day moving average rising above a 200-day average is often read as a bullish trend signal.

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