A smoothed line that filters out day-to-day noise to show the underlying price trend.
A moving average is the average closing price over a fixed recent window (say, the last 50 or 200 trading days), recalculated every day as the window rolls forward. Plotted alongside the actual price, it smooths out daily noise so the broader trend is easier to see.
A shorter window (e.g., 20 days) hugs the actual price closely and reacts fast; a longer window (e.g., 200 days) moves slowly and represents a longer-term trend. Neither is "correct" — they answer different questions about the same price series.
Some investors watch whether the price is above or below its own long-term moving average as a rough trend signal (above = uptrend, below = downtrend), or watch when a short-term average crosses a long-term one.
A moving average describes the past, not the future — it has no predictive power on its own, and crossing signals produce plenty of false alarms, especially in a choppy, sideways market. It's a description of trend, not a forecast.
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