DEFINITION of 'Crossover'

The point on a stock chart when a security and an indicator intersect. Crossovers are used by technical analysts to aid in forecasting the future movements in the price of a stock. In most technical analysis models, a crossover is a signal to either buy or sell.

Below we have a stock that falls below its 20-day moving average - a bearish sign.



An example of a crossover would be when the security line breaks through its 25-day moving average which may be a signal to buy the stock. Some of the indicators that use crossovers are "moving average" and "Bollinger Bands®".

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  1. How are double exponential moving averages applied in technical analysis?

    Double exponential moving averages (DEMAS) are commonly used in technical analysis like any other moving average indicator ... Read Full Answer >>
  2. How can I use simple moving averages to swing trade?

    Use simple moving averages (SMAs) as technical indicators to signal buy and sell entries when swing trading. SMAs provide ... Read Full Answer >>
  3. How can I use simple moving averages to signal when to buy or sell stocks?

    Traders and investors use simple moving averages (SMAs) to signal when they should buy or sell stocks. Use SMAs to time entries ... Read Full Answer >>
  4. How can the exponential moving average be used in swing trading?

    The exponential moving average (EMA) is a variation of the simple moving average that places more emphasis on the latest ... Read Full Answer >>
  5. What is a common strategy traders implement when using the Vortex Indicator (VI)?

    Traders primarily use the vortex indicator to spot trends, gauge trend strength and spot exit / entry points. The trading ... Read Full Answer >>
  6. What are the best technical indicators tocomplement the Volume Weighted Average Price ...

    Most trading strategies that incorporate the volume-weighted average price (VWAP) are short-term and automated. That's not ... Read Full Answer >>
  7. How are Donchian channels used when building trading strategies?

    Donchian channels are used to show volatility, breakouts and potential overbought/oversold conditions for a security. The ... Read Full Answer >>
  8. Why is the Dual Commodity Channel Index (DCCI) important for traders and analysts?

    The dual commodity channel index (DCCI) is an adaptation of the original commodity channel index (CCI) that was developed ... Read Full Answer >>
  9. What is a common strategy traders implement when using the Guppy Multiple Moving ...

    Daryl Guppy was the first trader to differentiate between the market activity of traders versus investors through short-term ... Read Full Answer >>
  10. What are the best technical indicators to complement the Elder-Ray Index?

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  11. What is the Dual Commodity Channel Index (DCCI) formula and how is it calculated?

    The dual commodity channel index (DCCI) is a technical indicator used to show whether a security is overbought or oversold. ... Read Full Answer >>
  12. How do I create a trading strategy with Bollinger Bands® and moving averages?

    Bollinger Bands are a popular technical volatility indicator. They place upper and lower bounds around the trading ranges ... Read Full Answer >>
  13. How are moving averages used in trading?

    Moving averages are very popular tools used by technical traders to measure momentum. The main purpose of these averages ... Read Full Answer >>

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