Death Cross

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DEFINITION of 'Death Cross'

A crossover resulting from a security's long-term moving average breaking above its short-term moving average or support level.

 

Death Cross

BREAKING DOWN 'Death Cross'

As long-term indicators carry more weight, this trend indicates a bear market on the horizon and is reinforced by high trading volumes. Additionally, the long-term moving average becomes the new resistance level in the rising market.

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RELATED FAQS
  1. Are exponential moving averages more effective than simple or weighted moving averages?

    An exponential moving average (EMA) uses an exponentially weighted multiplier to give more weight to recent prices, which ... Read Full Answer >>
  2. Why is the 200 Simple Moving Average (SMA) so common for traders and analysts?

    The 200 simple moving average (SMA) is considered a key indicator by traders and market analysts for determining the overall ... Read Full Answer >>
  3. What is the difference between a Golden Cross and a Death Cross Pattern?

    The golden cross and the death cross are exact opposites. The golden cross indicates a long-term bull market going forward, ... Read Full Answer >>
  4. How are Golden Cross patterns interpreted by analysts and traders?

    The golden cross – which occurs when a short-term moving average crosses over a major long-term moving average to the upside ... Read Full Answer >>
  5. How can traders profit from a death cross pattern?

    Traders use the death cross to seek long-term bear market profits, either by using it to identify an entry point into the ... Read Full Answer >>
  6. What does it mean when an index or stock exhibits a death cross?

    One of the growing trends in technical stock market analysis involves the combination of long-term moving averages and short-term ... Read Full Answer >>
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