Moving Average

From Reuters Financial Glossary

A technical analysis indicator that provides a way of smoothing data and is used to confirm price trends. It reduces the effects of isolated sharp price movements and shows the underlying trend more clearly. A moving average is usually calculated by adding a series of closing prices and then averaging the data on a period-by-period basis. As the period moves on, the oldest price in the sequence is dropped and replaced by the current price.

See also: Technical Analysis