Level: Beginner
A golden cross is a basic bullish pattern that forms when a shorter term moving average “crosses” above a longer term moving average. An example would be if ABC’s 15 day moving average rose above it 50 day moving average. Many technical analysts interpret this pattern as a sign that a new trend is forming or that the existing trend is getting stronger. A rise in volume immediately after the cross helps confirm the pattern.
Death crosses are the exact opposite: when the shorter term moving average crosses under the long term moving average. Death crosses are regarded as a bearish sign, and they, like golden crosses, are often confirmed with a rise in volume after the cross.