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200-Day Moving Average

The 200-day moving average (200-DMA) is the arithmetic mean of a security's closing prices over the most recent 200 trading sessions, equal to roughly 40 weeks of market activity. Price above the 200-DMA defines a long-term uptrend; price below it defines a long-term downtrend. It is the most widely watched trend filter in global markets and a coordination point for institutional, systematic, and retail participants alike.

HOW IT WORKS

The 200-DMA is a simple moving average: each of the 200 closing prices carries equal weight of 0.5%. Each new session, the oldest close drops off and the most recent close enters, so the line moves gradually and remains smooth. A single day's close shifts the 200-DMA by only (today's close − the close 200 days ago) ÷ 200, making it slow to react by design.

Two factors matter beyond price relative to the line:

  • Slope — a rising 200-DMA confirms trend health; a flat or falling line signals deterioration even when price remains above it.
  • Reclaim quality — a price cross accompanied by the slope turning positive is a stronger regime signal than a cross against a declining line.

Common variants include the 200-day exponential moving average, which weights recent prices more heavily and reacts faster, and the 40-week moving average, its weekly-chart equivalent. Notable cross signals are the golden cross (50-DMA crossing above the 200-DMA) and the death cross (50-DMA crossing below).

IN TAPEBOARD

In the Tapeboard terminal, the 200-DMA is available as an overlay on any price chart and serves as a standard regime filter across watchlists and screeners. Key uses include:

  • Regime coloring — charts shade the background to indicate whether price is above or below the 200-DMA, giving an at-a-glance trend read across a full watchlist.
  • Screener filter — filter any universe by price > 200-DMA or price < 200-DMA to narrow to names in confirmed uptrends or downtrends.
  • Alert triggers — set a cross alert on any ticker so Tapeboard notifies you the session a close breaches the 200-DMA in either direction.
  • Slope indicator — a companion slope reading displays whether the 200-DMA is rising, flat, or falling, helping distinguish healthy pullbacks from trend deterioration.

Note that the 200-DMA is a lagging indicator. In sideways markets it can generate repeated false crosses; pairing it with a momentum or breadth confirmation reduces whipsaw exposure.

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