Technicals
Death Cross
A death cross is the bearish twin of the golden cross, a lagging break in the long moving-average trend.
The death cross gets the dramatic name and a lot of headlines. Mechanically it is modest: the average of the last 50 closes has fallen below the average of the last 200. By the time it prints, the stock has already declined. Selling only because the cross printed often means selling after a large part of the move.
Use it as a risk flag, not a prophecy. If the business thesis is intact, a death cross can be the discomfort you were paid to endure. If the thesis depended on momentum or on a multiple that only made sense in an uptrend, the cross is a prompt to reread the thesis. The name is marketing. The calculation is two averages.
Formula
A death cross is the 50-day moving average crossing below the 200-day moving average.
Live example
Apple Inc. (AAPL) last printed at $345.33 with a market cap of $5.04T. Apply the formula on this page to that live price. Where the quote is missing an input, the stock page's financials are the next place to read it.
Related
Golden Cross · Moving Averages · Drawdown
See it on a list: best stocks · screener
Questions
Should I sell every death cross?
A blanket rule sells a lot of temporary dips and pays taxes and spreads to do it. Decide from the business and your horizon.
Can it whipsaw?
Yes. In a sideways market the averages cross back and forth. The signal is least useful when there is no trend.