Shares of Meta Platforms, Inc. may soon be heading lower. A classic “death cross” has formed on the chart.
Many traders use moving averages to gain insight into the future direction of the market. When a short-term moving average crosses above a longer-term one, it suggests that the market is about to go higher. The opposite is true when the shorter-term average crosses below the longer-term one.
Two widely followed indicators are the 50- and 200-day moving averages. When the 50 crosses below the 200, it’s called a death cross. This means the average price of the past fifty days is lower than the average price of the past two hundred days.
As the name implies, this pattern could signal that a new downtrend is forming.
By Mark Putrino
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