Date of this Version



© 1991, The Board of Regents of the University of Nebraska on behalf of the University of Nebraska–Lincoln Extension. All rights reserved.


This fifth of a nine NebGuide series is designed to show how trend lines can assist producers and others in analyzing the market's technical side.

What is the objective in using moving averages?

Technical analysts construct a moving average of price to provide a better market timing indicator than the traditional straight-line method. The idea is to smooth out daily price fluctuation to get a clear view of the market trend. The moving average is a method for averaging near-term prices in relation to long-term prices. This technique should not be confused with the oscillators described in NebGuide No. 8 in this series, G91-1058, Using the RSI and Other Oscillators to Analyze the Market.