© Reuters. Ominous Death Cross Forms On Toyota Motor’s Chart
If history is any guide, there may be trouble ahead for shares of Toyota Motor (NYSE:TM). A so-called “death cross” has formed on its chart and, not surprisingly, this could be bearish for the stock.
What To Know: Many traders use moving average crossover systems to make their decisions.
When a shorter-term average price crosses above a longer-term average price, it could mean the stock is trending higher. If the short-term average price crosses below the long-term average price, it means the trend is lower.
Why It’s Important: The 50-day and the 200-day simple moving averages are commonly used.
The death cross occurs when the 50-day moves below the 200-day. This could mean the long-term trend is changing.
That just happened with Toyota Motor, which is trading around $171.25 at publication time.
Remember: Seasoned investors don’t blindly trade Death Crosses.