Definition
Death Cross
A death cross is a bearish signal when a short-term moving average crosses below a long-term one, typically the 50-day below the 200-day.
The death cross forms when the 50-day moving average falls below the 200-day moving average, warning that medium-term momentum has turned down and a longer bearish phase may follow. Like the golden cross, it is a lagging confirmation rather than a leading signal.
Indian market commentators highlight a death cross on Nifty, Bank Nifty, or major stocks as a caution flag, though by the time it appears much of the fall may already have happened. Traders use it as a trend filter — leaning bearish or hedging — rather than as a stand-alone sell trigger.
Related terms
- MACDMACD (Moving Average Convergence Divergence) is a momentum indicator built from the difference between two moving averages.
- Dow TheoryDow Theory is the foundational framework of technical analysis, describing how markets trend through primary, secondary, and minor moves.
- Golden CrossA golden cross is a bullish signal when a short-term moving average crosses above a long-term one, typically the 50-day above the 200-day.
- Moving AverageA moving average smooths price data over a set period to reveal the underlying trend.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.