---
title: Moving Averages SMA and EMA in Stock Trend Technical Analysis
description: Understand SMA and EMA calculations, the 1,114-point VN-Index MA200 test in November 2023, and three pitfalls in applying moving averages.
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datePublished: 2026-10-26T00:00:00+07:00
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author:
  name: Gini
  url: https://ginity.vn/en/authors/gini
reviewer: Ginity Editorial Desk
analyst:
  name: Đào Ngọc Bảo Linh
  role: Finance and securities specialist
  location: Ho Chi Minh City
  telephone: "+84932439639"
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  name: Learn investing
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tickers:
  - VNINDEX
  - HPG
  - FPT
sources:
  - name: Ho Chi Minh Stock Exchange (HOSE)
    url: https://www.hsx.vn/vi/van-ban-phap-quy/quy-che
    title: HOSE Trading Regulations and Operating Guidelines
  - name: Vietnam Exchange (VNX)
    url: https://vnx.vn/vi/van-ban-phap-ly/6
    title: Regulations on the Construction, Management, and Operation of Equity Indices
  - name: Ho Chi Minh Stock Exchange (HOSE)
    url: https://www.hsx.vn/vi/du-lieu-giao-dich/quy-mo-giao-dich
    title: Trading Scale and Volume Data for Listed Equities
  - name: State Securities Commission of Vietnam
    url: https://congbothongtin.ssc.gov.vn/
    title: Information Disclosure System for Public Companies and Trading Regulations
  - name: Vietnam Securities Depository and Clearing Corporation (VSDC)
    url: https://vsdc.vn/vi/lel/6
    title: Regulations on Clearing and Settlement Operations
publisher: Ginity
attribution: 'Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content.'
disclaimer: "Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources."
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---

# Moving Averages SMA and EMA in Stock Trend Technical Analysis

> Understand SMA and EMA calculations, the 1,114-point VN-Index MA200 test in November 2023, and three pitfalls in applying moving averages.

Gini · Learn investing · 2026-10-26 · https://ginity.vn/en/blog/moving-averages

_Lead analyst: Đào Ngọc Bảo Linh · Finance and securities specialist · Ho Chi Minh City · 0932 439 639_

## Key takeaways

- The simple moving average SMA-20 averages 20 sessions, while EMA-20 applies a 9.52% multiplier to the latest session.
- The SMA-200 measures long-term trend; on 08/11/2023, the VN-Index rose to 1,113.43 points to approach the SMA-200 zone at 1,114 points.
- Crossovers between SMA-50 and SMA-200 carry a lag of 15 to 30 trading sessions relative to actual market turning points.
- Standard moving average cycles in Vietnam span 3 time horizons: short-term 20 sessions, medium-term 50 sessions, and long-term 200 sessions.

## Conceptual framework and mathematical formulas for SMA and EMA

In technical analysis, a moving average is a foundational tool that smooths price series over time to filter out transitory volatility and identify the underlying [trend](/en/glossary/trend). The two primary variants utilized across institutional research are the [simple moving average (SMA)](/en/glossary/sma) and the [exponential moving average (EMA)](/en/glossary/ema).

Under standard mathematical formulas in quantitative analysis, an SMA of period $N$ is calculated as the arithmetic mean of closing prices across the preceding $N$ sessions:

$$\text{SMA}_N = \frac{1}{N} \sum_{i=1}^N P_i$$

In contrast, the EMA assigns exponentially decreasing weighting to older observations, allowing the indicator to respond more swiftly to emerging price impulses. According to mathematical formulas, the smoothing factor $K$ for an EMA is defined as $K = \frac{2}{N + 1}$. Specifically, for a 20-session EMA, the smoothing factor $K$ equals approximately 9.52% (derived from $2 / 21$), meaning the most recent session accounts for 9.52% of the average value, whereas for a 50-session EMA, this weight decreases to 3.92% (derived from $2 / 51$).

Daily moving averages are usually computed on closing prices. On HOSE the closing price is set by the closing call auction (ATC) that ends at 14:45, under the Regulation on listing and trading of listed securities issued with Decision 22/QD-HDTV dated 16/03/2026 of VNX (See the full text at [Vietnam Exchange (VNX), Regulations section](https://vnx.vn/vi/van-ban-phap-ly/6)).

Once learners have mastered candlestick reading and [volume and trend confirmation](/en/blog/volume-and-trend-confirmation), integrating moving averages creates a comprehensive trend filtering system on the [tools](/en/tools) platform.

## Applying moving averages to trend filtering on verified market data

In Vietnamese equity markets, moving average parameters are structured across three distinct time horizons: short-term (SMA-20 representing roughly one month of 20 trading sessions), medium-term (SMA-50 representing one calendar quarter), and long-term (SMA-200 representing one annual cycle). Moving averages serve as dynamic [support and resistance](/en/glossary/support-resistance) zones that adjust alongside ongoing price action.

According to official trading statistics from HOSE (See the full text at [HOSE Trading Scale](https://www.hsx.vn/vi/du-lieu-giao-dich/quy-mo-giao-dich)), the behavior of the VN-Index during November 2023 around its 200-day simple moving average (located at 1,114 points) provides a clear case study in long-term trend verification. On 06/11/2023, the VN-Index closed at 1,089.66 points, situated below its SMA-200. By the session of 08/11/2023, an expansion in trading turnover propelled the index up 33.14 points (or 3.07%) to 1,113.43 points, directly testing the SMA-200 threshold at 1,114 points.

| Trading Date | VN-Index Closing Level | SMA-20 Position (Points) | SMA-200 Position (Points) | Price Position Relative to MAs | Technical Status |
| --- | --- | --- | --- | --- | --- |
| 06/11/2023 | 1,089.66 points | 1,097 points | 1,114 points | Below SMA-20 and SMA-200 | Downtrend dominant |
| 08/11/2023 | 1,113.43 points | 1,092 points | 1,114 points | Above SMA-20, testing SMA-200 | Follow-through rebound |
| 15/11/2023 | 1,122.50 points | 1,085 points | 1,115 points | Above SMA-20 and SMA-200 | Long-term resistance breakout |
| 20/11/2023 | 1,103.66 points | 1,087 points | 1,115 points | Pullback below SMA-200 | Dynamic support retest |

*Source: Ho Chi Minh Stock Exchange (HOSE), historical VN-Index market data 2023.*

According to historical time-series data from HOSE, after breaking above 1,115 points on 15/11/2023, the index encountered profit-taking pressure, retreating to 1,103.66 points on 20/11/2023 to test dynamic buying interest near the 200-day average. This consolidation proves that major moving average benchmarks like the SMA-200 consistently serve as key psychological focal points for institutional capital.

## Three classic pitfalls when applying moving averages in trend identification

The first pitfall is mechanically trading crossover signals (such as a shorter average crossing above a longer one) within a range-bound market. Moving averages are inherently lagging indicators. Under quantitative analysis principles, in sideways environments lacking clear direction, moving average crossovers produce repeated false signals (whipsaw effect) as price swings back and forth across the averages.

The second pitfall is disregarding the built-in latency of broader cycle crossovers. When the SMA-50 crosses above the SMA-200 (Golden Cross) or drops below it (Death Cross), the market has typically traversed 15 to 30 sessions since the actual inflection point. If an analyst waits for the crossover to complete before identifying the trend, the [margin of safety](/en/glossary/margin-of-safety) of the expansion cycle has typically narrowed considerably.

The third pitfall is curve-fitting moving average parameters to past price action. Beginners frequently alter parameters from SMA-20 to SMA-18 or SMA-23 merely to ensure the line touches recent candle shadows. Over-optimizing parameters degrades statistical objectivity and invalidates reliability when testing against future market data.

## Calculating and auditing moving averages on primary datasets

To master moving average analysis, analysts should understand how to retrieve unadjusted datasets and run independent computational scripts rather than relying blindly on commercial terminal overlays.

Under the index governance regulations issued by VNX via Decision 67/QD-HDTV dated 12/12/2025 (See the full text at [Vietnam Exchange (VNX)](https://vnx.vn/vi/van-ban-phap-ly/6)), closing price series for the VN-Index and constituent baskets are standardized following each session.

Readers can independently verify moving average calculations through the following steps on official websites:

1. HOSE Disclosure Portal at `https://www.hsx.vn/vi/tin-tuc/cong-bo-thong-tin`: Select "Trading Data", specify historical sessions such as 08/11/2023 or 20/11/2023 to download closing price series for the VN-Index, and apply a 200-period simple moving average formula to compute the 1,114-point benchmark.
2. VSDC Portal (See the full text at [VSDC Regulations](https://vsdc.vn/vi/lel/6)): Check corporate action circulars and cash dividend schedules to adjust historical price series accurately.
3. VNX Legal Portal at `https://vnx.vn/vi/van-ban-phap-ly/6`: Review index ground rules for the VN30 and VN100 to understand free-float-adjusted market-capitalization weighting methodologies.

Appreciating the mathematical foundation and structural lag of moving averages ensures that learners treat them as objective filters, fitting into the broader [Technical analysis & candlesticks](/en/learn/technical-analysis) roadmap.

## Sources

- Ho Chi Minh Stock Exchange: [HOSE Trading Regulations and Operating Guidelines](https://www.hsx.vn/vi/van-ban-phap-quy/quy-che) (28/10/2016)
- Vietnam Exchange: [Regulations on the Construction, Management, and Operation of Equity Indices](https://vnx.vn/vi/van-ban-phap-ly/6) (12/12/2025)
- Ho Chi Minh Stock Exchange: [Trading Scale and Volume Data for Listed Equities](https://www.hsx.vn/vi/du-lieu-giao-dich/quy-mo-giao-dich) (08/11/2023)
- State Securities Commission of Vietnam: [Information Disclosure System for Public Companies and Trading Regulations](https://congbothongtin.ssc.gov.vn/) (31/12/2020)
- Vietnam Securities Depository and Clearing Corporation: [Regulations on Clearing and Settlement Operations](https://vsdc.vn/vi/lel/6) (29/04/2025)

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_Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content._

_Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources._