What Each Moving Average Represents
Toggling MAs on the Chart
On the Investography stock chart, you can toggle MA20, MA50, and MA200 overlays on and off using the indicator controls. The MAs are displayed as coloured lines across the candlestick chart. The MA20 is calculated from daily close prices stored in the stock_ohlcv table for the past 20 sessions. Longer averages require proportionally more historical data to display correctly.
Using MAs for Support and Resistance
In an uptrend, the MA20 often acts as dynamic support — the stock pulls back to it and bounces. If the MA20 is broken, the MA50 is the next support level. In a downtrend, these same levels act as resistance. A stock attempting to break above its MA200 after a prolonged downtrend is at one of the most watched chart levels for technical traders.
Set a price_above alert at the MA200 level for stocks that have been in a downtrend you want to monitor for recovery. When the stock approaches that level, the alert fires and you can assess whether the break is happening with sufficient volume to be sustainable.
Golden and Death Cross
When the MA20 crosses above the MA50, this is called a golden cross and signals improving short-to-medium term momentum. When MA20 crosses below MA50, it is a death cross. Investography's crossing detection job monitors these crossings daily and can notify you via the ma_cross_golden and ma_cross_death alert types available on Pro and Premium plans.