Moving Average Crossover

Overview
A Moving Average is an indicator that shows the average value of a security's price over a period of time.  When calculating a moving average, a mathematical analysis of the security's average value over a predetermined time period is made.  As the security's price changes, its average price moves up or down.  See the Moving Average page for more information on moving averages.

The Moving Average Crossover indicator prompts you for two parameters.  A shorter moving average and a longer moving average.

Interpretation
The most popular method of interpreting a single moving average is to compare the relationship between a moving average of the security's price with the security's price itself.  However, you can also compare the relationship between a shorter-term moving average and a longer-term moving average.  For example, by entering 9 in the first box,  and 39 in the second box, MetaStock for Java will plot both moving averages on the price chart.  Look for possible buying opportunities when the shorter moving average crosses above the longer moving average.  Conversely, look for possible selling opportunities when the shorter moving average crosses below the longer moving average.