Golden Cross

A “Golden Cross” is a Bullish technical indicator that occurs when a shorter-term moving average crosses above a longer-term moving average. This pattern is often used by traders to signal potential upward momentum in an Asset’s price.

Typically, the 50-day moving average (MA) crossing above the 200-day moving average is considered a Golden Cross. This crossover suggests that recent price trends are stronger than longer-term trends, which can indicate a potential buying opportunity.

For example, if the 50-day MA of a Stock moves from $30 to $32 and crosses the 200-day MA, which is at $31, this might suggest a Bullish trend. Traders often look for confirmation from other indicators or volume increases to strengthen the validity of the signal.

In a case where the market is generally in an upward trend, the appearance of a Golden Cross can rEINforce confidence among investors, possibly leading to increased buying activity and further price appreciation.