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Finance Glossary

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200 Day, 50 Day Moving Averages


Moving averages are a series of snap shots of stocks' closing prices over a given trailing 200 day period when the market actually ran (or walked). Traders using technical analysis follow the 200 day and the 50 day closely, looking for resistance lines both as floors and ceilings on securities. Since "everyone" follows the same charts, and often those are the buyers and sellers making markets in the stocks, in the short run, the moving averages matter. Stocks don't always follow them - and when they don't it's called a break out and is not related to Oxy 5 or 10 or Jessica Simpson.