Golden Cross vs Death Cross: How Traders Spot Trend Reversals

A Golden Cross occurs when a short-term moving average (e.g., 50-day MA) crosses above a long-term moving average (e.g., 200-day MA) from below.

👉 It signals the start of an uptrend, suggesting that bullish momentum is building up.

A death cross happens when a short-term moving average (e.g., 50-day MA) crosses below a long-term moving average (e.g., 200-day MA) from above.

👉 It signals the start of a downtrend—indicating that selling pressure might increase.

✅ Step 1: Confirm the Crossover

• Higher volume during the crossover = More reliable signal

✅ Step 2: Pair with Other Indicators

• Use RSI (Relative Strength Index), MACD (moving average convergence divergence), and support-resistance levels.

• Example: If RSI is below 40, MACD forms a negative crossover, and there’s a breakdown of key support levels—a Death Cross strengthens the sell signal.

✅ Step 3: Trending Markets Work Best

• Golden & Death Crossovers work best in trending markets.

• They may fail in sideways conditions—so always confirm with other indicators!

  

🔹 Golden Crossover in Nifty 50

• If Nifty 50 forms a Golden Cross (50-day MA crosses above 200-day MA), traders may anticipate buying interest and enter long positions.

🔹 Death Crossover in Nifty 50

• If 50-day MA crosses below 200-day MA, traders may expect further downside and look for short-selling opportunities.

📌 PS: In a recent Sahi.com analysis,

• Reliance showed a Golden Cross ✅

  

• ITC formed a Death Cross ❌

  

The next time you see a Golden or Death Crossover, will you follow the trend? Or will you look deeper before taking action? 🔥 Let’s discuss!