What is a 200-day moving average chart?

The 200-day moving average helps investors identify trends in a stock's overall price over the past 200 days. Financial publications provide charts that show data points for each day in the past 200 days and then calculate the moving average by dividing each data point by 200.

The 200-day moving average represents support and resistance levels in individual stocks. Strong support levels indicate heavy buying from investors. Conversely, resistance levels show that investors are selling their positions in a particular stock. Other market indicators include the 50-day and 100-day moving averages. Each indicator represents the average price of a stock over the past 50, 100 and 200 days.