Daily charts in both MarketSmith and Investors.com identify the 50-day moving average as the bright red line weaving horizontally through the chart. If you're looking at a weekly chart, you can find the 50-day line's nearly identical twin: the 10-week line. The 10-week moving average tracks a stock's weekly closes over the past 10 weeks.
What happens if a stock moves below the 50-day moving average?
If a stock's price moves significantly below the 50-day moving average, it's commonly interpreted as a trend change to the downside. A simple moving average places equal weight on each session's closing price while an exponential moving average places more weight on recent closing prices. What Is the 50-Day Simple Moving Average?
What is a 50-day moving average (SMA)?
Long-term trend traders commonly use the 50-day SMA, whereas intraday stock or forex traders often employ a 50-day exponential moving average on a one-hour chart. Watch for times when the price of a market leading stock breaks below the 50-day moving average on heavy volume and can't sustain a rally back above it.
