Death Cross Pattern

A Death Cross pattern is a pattern used when analyzing charts from a moving average perspective.

A Death Cross pattern develops on a stock chart when the 50 Day moving average line crosses below the 200 Day moving average line. This pattern is considered by most to be a lagging confirmation of a new bearish uptrend that is already underway.

This next chart is a 2 year daily candlestick chart for Apple (AAPL). As you can see from this example, the Death Cross pattern was definitely a lagging indicator for its new downtrend.

Analyzing the Share Price Action for Apple (AAPL) After It Developed a Death Cross Pattern

The Death Cross, in most cases, is simply a confirmation of the downtrend at hand. Do not rely on on this lagging indictor to determine the timing of selling shares. If you had waited for the Death Cross pattern to develop before exiting your position, most of your profits would have evaporated. You might even be slightly underwater depending upon where you joined in on Apple's uptrend.

Tips & Trading Techniques

Here are some of my trading tips and strategies to use when a Death Cross pattern develops on your favorite stock chart.....

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