[Stock] A summary of the meaning of golden cross and dead cross

[Stock] A summary of the meaning of golden cross and dead cross

 

 

1. Golden Cross

  A golden cross is a phenomenon that predicts stock prices in the stock market. A golden cross is a phenomenon in which the short-term moving average of a stock price or trading volume rapidly rises above the mid- to long-term moving average from the bottom to the top. When a golden cross appears, we interpret it as a sign of a strong bull market transition and believe that the stock price will rise. A moving average line is a line connecting the average price of the market for a certain period of time, such as 4 days, 20 days, 60 days, 120 days, etc. Depending on the period, up to 25 days is called short-term, 100 days as medium-term, and longer than 100 days as long-term.

 

 

[Stock] A summary of the meaning of golden cross and dead cross

  In other words, the meaning of the golden cross in the stock market is that the line chart has the same shape as above. There is a short-term shape in which the 5-day line passes the 20-day line, and a medium-term shape in which the 20-day line passes the 60-day line. Finally, the 60-day line passes the 120 line. There are also long-term ones. From an investment point of view, when a golden cross occurs, it can be interpreted as a signal that the stock price will turn bullish and it can be a good time to buy. 

 

2. Dead Cross

  A dead cross is when the short-term moving average moves from the top to the bottom of the medium-term or long-term moving average, which is interpreted as a sign that the stock price is turning into a bear market.

 

[Stock] A summary of the meaning of golden cross and dead cross

 

When the above line chart shape appears, it can be considered that a dead cross has occurred. When such a case occurs, it is advantageous to organize the stocks you own even by making a stop loss as much as possible. Of course, in the case of long-term investors, there may be people who just hold the stock.