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Golden Cross

A Golden Cross pertains to a chart pattern wherein a shorter-term moving average (MA) crosses on top of a longer-term moving average. This chart pattern usually signals a bullish period.

The Golden Cross pattern usually takes place in three stages:

● The presence of a downtrend where the shorter Moving Average is below the longer-term one

● There is a reversal and the shorter-term Moving Average crosses over the longer-term

● Continued uptrend commences; the shorter-term MA maintains its position above the longer-term Moving Average

 

Upon the consideration of a Golden Cross, the moving averages usually used are the 50-period and the 200-period Moving Average.

A Golden Cross is held valid through these of both SMA pairs and Exponential Moving Average pairs.

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