Golden Cross Pattern
A Golden Cross pattern is a pattern used when analyzing charts from a moving average perspective.
A Golden Cross pattern develops on a stock chart when the 50 Day moving average line crosses above the 200 Day moving average line. This pattern is considered by most to be a lagging confirmation of a new bullish uptrend that is already underway. However when I see a Golden Cross pattern develop, I see an opportunity present itself.
This next chart is a 2 year daily candlestick chart for Apple (AAPL). As you can see from this example, the Golden Cross pattern was definitely a lagging indicator for its new uptrend.
All is not lost when you discover a Golden Cross pattern, even though it is a lagging indicator for the new uptrend. Don't get me wrong though, you will miss out on some of the initial profits from the new uptrend that is already underway.
The example for Apple (AAPL) in the above chart shows that if you had waited for the Golden Cross pattern to develop before entering into a long position, you missed out on the first 15% of gains.
Tips & Trading Techniques
Here are some of my trading tips and strategies to use when a Golden Cross pattern develops on your favorite stock chart.....
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