Conditions for Moving Average Method

1. The situations are regular and periodic.
2. The trend is linear.
3. The extent of moving average is exactly equal to aura multiple of the period of oscillation.
Since different cycles vary in amplitude and period , in such cases the appropriate period of moving average should be equal to a somewhat greater than the mean period of the cycles in the data.

In such cases, the moving average does not completely wipe out the cyclic moments and hence could not give a nice picture of the general Trend.