What is a moving average?
A smooths out price noise by averaging the closing price over N days. The 50-day MA tracks medium-term ; the 200-day MA represents long-term direction. Price above the 200-day MA is generally considered a healthy .
Price above the 200-day MA = long-term uptrend.
Golden Cross and Death Cross
A golden cross — when the crosses above the 200-day MA — is a widely watched signal, confirming a shift to a long-term . The death cross (50-day crossing below 200-day) is the opposite — a signal. These crossovers happen slowly, so they lag price.
Moving averages as support and resistance
Key (50-day, 200-day) often act as dynamic and levels. A to its 200-day MA and bouncing is called "testing the 200." Traders watch these levels closely because millions of other traders are watching too — creating self-fulfilling reactions.
EMA vs SMA
A simple (SMA) weighs all days equally. An (EMA) weights recent days more heavily, making it more responsive to new . Traders who want faster signals use EMAs; those who want smoother signals use SMAs.
EMA reacts faster. SMA is smoother. Both have valid uses.