Definition

The 50 DMA is a technical indicator that observes the average closing prices for an individual equity over the previous 50 days.

Why is this important?

The 50 DMA provides investors insights into the short term trends of a stock. Like the 200 DMA traders consider a stock price that is trading at or above its 50 DMA in an uptrend. However, if a stock closes below its 50 DMA could possible indicate the beginning of a down trend.