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Moving Averages (MA20, MA50, MA200)

Moving averages smooth out price noise and show trend direction. The 20, 50, and 200-day MAs are the most watched by institutional investors -- making them self-fulfilling support and resistance levels.


What each MA represents

MA20 (20-day): short-term trend -- where is the stock going this month?
  MA50 (50-day): medium-term trend -- the 'health' of a stock's momentum.
  MA200 (200-day): long-term trend -- the line institutional investors use
   to decide if a stock is in a bull or bear phase.

Price vs MA -- simple signals

Price > MA200: stock is in a long-term uptrend (bullish bias).
  Price < MA200: stock is in a long-term downtrend (bearish bias).
  Price crossing MA50 from below: medium-term bullish signal.
  Price bouncing off MA50: the MA acted as support -- continuation signal.

Golden Cross & Death Cross

Golden Cross: MA50 crosses above MA200.
   -> One of the most bullish signals; triggers major institutional buying.
  Death Cross: MA50 crosses below MA200.
   -> Major bearish signal; often leads to sustained selling pressure.

✓ Quick Tips
  • The MA200 is the most important line on any chart -- know where it is.
  • In uptrends, MAs act as support (price bounces up). In downtrends, they act as resistance.
  • When MA20 > MA50 > MA200, all trends are aligned bullish -- high conviction.
  • Avoid buying stocks far above their MA200; mean reversion risk is high.

Related: MACD -- Moving Average Convergence DivergenceGolden Cross & Death CrossRSI -- Relative Strength Index

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