Trading strategies
Death cross
Definition
A shorter average crossing below a longer one, classically the 50-day below the 200-day. Read as bearish.
Example
Say a stock slides from $120 to $95 over four months, and its 50-day SMA falls below its 200-day SMA with both near $108: a death cross. The signal arrives after a $25 drop, about 21%, so it confirms a downtrend already under way; it does not mark where the decline began.
Hypothetical numbers, for illustration only.
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