Tool Tutorials

5-Day MA Extensions Tutorial

What a moving average extension is

A moving average is just the average closing price over the last N sessions. The 5-day is the mean of the last five closes, and it shifts each day as a new bar replaces the oldest one.

The extension is how far price has run from that line, measured as a percentage. If the 5-day sits at 200 and price is at 210, you're 5% extended. It's a single number for how stretched the move is.

MA Extension % = (Price − Moving Average) ÷ Moving Average × 100

Practical example (Micron Technology, MU)

  • Current candle high / price: $970.72
  • 5-day moving average: $901.83
MA Extension % = ($970.72 − $901.83) ÷ $901.83 × 100 = +8.56%

Because MU's peak traded $68.89 above its 5-day baseline, the stock registered an 8.56% upside extension.

5-day moving average the gap extension high of the candle measured from the top of today's candle down to the average
The 5-day average trails beneath a fast move. The reading is the distance from the candle's high down to that line.

Price can stretch in both directions. Above the average is an overbought push, below it is an oversold dislocation, and the two don't behave the same. So the engine keeps them separate: a stretch above the line is only ever compared against past stretches above the line.

Matching on size and direction

The tool ranks today's extension against every extension that ticker has ever printed.

Extensions above the average get compared to extensions above only, never against extensions below and vice versa. The two behave differently, and mixing them just muddies the sample.

For example, if MU's extended 8.56% above its 5-day, the tool looks for upside extensions similar in size to 8.56%.

Tool Glossary

The Basics

Moving average

The average close over the last N sessions, recalculated each day. The tool reads the 5-day, so each session drops the oldest close and adds the newest.

MA extension

How far price sits above or below a moving average, in percent. A stock 8% over its 5-day average is stretched by its own standards.

The Readings

Matched days

The past sessions that met the same conditions you set. Every statistic the tool prints is measured from these and nothing else.

Sample

The number of matched occurrences behind a statistic. A 70% hit rate off 8 occurrences and a 70% hit rate off 400 are not the same claim. The sample is printed next to every result for that reason.

Average and median

The average is the mean of every result and gets pulled around by outliers. The median is the middle result, so it describes the typical case. When the two are far apart, a small number of large moves is doing the work.