The Magic of Moving Averages

This technical indicator can help predict where stocks are headed.

When price charts begin to look like jagged mountain ranges, it can be hard to map out which way stocks are headed. Enter the simple moving average. The tool is a staple of technical analysis—the practice of determining the direction of stock prices based on statistical patterns. It can sharpen the stock market picture, and, although a moving average won’t pinpoint peaks or troughs, it can tell you whether the momentum of a stock or an index is up or down.

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Ryan Ermey
Former Associate Editor, Kiplinger's Personal Finance

Ryan joined Kiplinger in the fall of 2013. He wrote and fact-checked stories that appeared in Kiplinger's Personal Finance magazine and on Kiplinger.com. He previously interned for the CBS Evening News investigative team and worked as a copy editor and features columnist at the GW Hatchet. He holds a BA in English and creative writing from George Washington University.