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Simple Moving Average Signal

HomeGlossarySSimple Moving Average Signal

A simple moving average (SMA) is one of the most-used technical indicators aimed at determining the current price trend of a security. The SMA provides a good trend indicator as it smooths the fluctuations of the security.
Shorter period SMA (usually 20 days or less) are indicators of short term price trends, medium period SMA (50 days) are considered as medium-term price trend, and longer period SMA (usually 200 days) are indicators of longer price trends.

This SMA signal is positive when a shorter period is above a longer period, and negative otherwise.

 

Simple Moving Average Signal

The simple moving average signal indicates for each stock whether the short period average price is above or below the longer period average price. The SMA signal will be positive when the shorter period selected is above a longer period selected.

Generally, SMA is calculated as the average closing stock price of the previous predetermined period. For example, the 20 days SMA is calculated as the sum of the closing prices in the previous 20 days, divided by 20. The SMA signal receives two values, either positive when the shorter-term SMA is above the Longer-term or negative when the shorter-term SMA is below the longer term.

 

Data Scope & Range

SMA is calculated daily for over 6,000 stocks in the historical database.
TipRanks calculates SMA from January 2009 to the present day.