Crossover

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.

Crossover






BREAKING DOWN 'Crossover'

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®".

RELATED TERMS
  1. Indicator

    Indicators are statistics used to measure current conditions ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth ...
  3. Stick Sandwich

    A technical trading pattern in which three candlesticks form ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following ...
  5. Moving Average Chart

    A tool used by technical analysts to track the price movements ...
  6. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
Related Articles
  1. Active Trading

    Finding The Trend With Aroon

    Don't be confused about whether a long-term trend will continue, stall or reverse.
  2. Options & Futures

    Trade Forex With A Directional Strategy

    Opening long or short positions to cash in on a trend is one of the simplest ways to trade forex.
  3. Forex Education

    An Introduction To Ichimoku Charts In Forex Trading

    Discover how this high-flying application can be used in forex trading.
  4. Chart Advisor

    How Are You Trading The Breakdown In Growth Stocks? (VOOG, IWF)

    Based on the charts of these two ETFs, bearish traders will start turning their attention to growth stocks.
  5. Stock Analysis

    The Top Rated Dividend Paying Stocks for 2016 (ABBV, BA)

    Discover five of the top-rated stocks that pay investors solid dividends that you may want to consider adding to your investment portfolio in 2016.
  6. Stock Analysis

    Will Virtusa Corporation's Stock Keep Chugging in 2016? (VRTU)

    Read a thorough review and analysis of Virtusa Corporation's stock looking to project how well the stock is likely to perform for investors in 2016.
  7. Chart Advisor

    Breakout Opportunity Stocks: CPA, GNRC, WWE

    After a period of contracting volatility, watch for breakouts and bigger moves to come in these stocks.
  8. Investing

    What Investors Need to Know About Returns in 2016

    Last year wasn’t a great one for investors seeking solid returns, so here are three things we believe all investors need to know about returns in 2016.
  9. Chart Advisor

    3 Charts That Suggest Now Is The Time To Invest In Real Estate (VNQ, SPG,PSA)

    Real estate assets have some of the strongest uptrends around. We'll take a look at three candidates poised for a move higher.
  10. Chart Advisor

    Stocks With More Upside Due to Bear Traps (TAP, SPY)

    A bear trap is a pattern that typically leads to at least a short-term rise in prices. Here are stocks exhibiting the pattern.
RELATED FAQS
  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?

    Dr. Alexander Elder developed the Elder-Ray index as a way to show the relative strength of buyers and sellers in a market. ... Read Full Answer >>
  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 >>
Hot Definitions
  1. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  2. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  3. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  4. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  5. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
Trading Center