The 200-day moving average is represented as a line on charts and represents the average price over the past 200 days (or 40 weeks). The moving average can give traders a sense regarding whether the trend is up or down, while also identifying potential support or resistance areas.
What is a 200-day simple moving average (SMA)?
The 200-day simple moving average (SMA) is considered a key indicator by traders and market analysts for determining overall long-term market trends. It is calculated by plotting the average price over the past 200 days, along with the daily price chart and other moving averages.
Is a 200-day moving average a good indicator?
In bull markets, the 200-day moving average is pretty useless. But during extended corrections like this one, it’s the most valuable indicator of all. The most important trend-following tool for growth stock investors is the simple 50-day moving average.
