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7.18What is the 200-day moving average?

1What is it?

The 200 DMA is the average close of the last 200 trading days (about 10 months), the classic long-term trend line.

2Why does it exist?

Many investors consider a stock above a rising 200 DMA to be in a long-term uptrend. A golden cross (50 DMA crossing above 200 DMA) is seen as bullish; a death cross (crossing below) as bearish.

3Quick revision
  • ~10 months average.
  • Long-term trend.
  • Golden cross / death cross.
4Knowledge check
Q1. What is a golden cross?Show answer

50 DMA crossing above the 200 DMA.

Q2. What is a death cross?Show answer

50 DMA crossing below the 200 DMA.

Q3. Are these crosses guaranteed signals?Show answer

No. They lag and can give false signals.

More in Level 7: Technical Analysis: Understanding Stock Charts