Updated: Nov 16, 2019
100%, It works.
1. Death Cross: This is the combination of two moving averages. It is used when a shorter-time frame moving average crosses over a higher-timeframe moving average, indicating a trend reversal in favor of the bears.
While computing Death Cross, a 50-DMA is the shorter time frame MA and 200-DMA is the higher time frame MA. Therefore, when the 50-DMA crosses down the 200-DMA, it is considered a sign of further weakness. Traders should keep a close watch on these stocks if the 50-DMA crosses down the 200-DMA. They should look to short-sell and/or exit, as these stocks can weaken further from current levels. This is BEARISH SIGN.
You can also take MA 25 - MA 50 for mid term as the way I did. In the above example, It already warned that TATA MOTORS will go down.
2. Golden Cross: This is the opposite of death cross. When the short-term moving average of a stock or index moves above the long-term moving average.
This pattern as a bullish indicator.
While computing Golden Cross too, a 50-DMA is the shorter time frame MA and 200-DMA is the higher timeframe MA. Therefore, when the 50-DMA crosses above the 200-DMA, it is considered a sign of further upside.
Again, You can also take MA 25 - MA 50 for the midterm as the way I did here.
Ex- Ashok leyland started its journey only when golden cross approved!
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