RE: Golden Cross18 Jan 2024 10:41
I'll try! Whilst I should have used the term 'ema' rather than sma, that is a minor issue. The 'ma' bit stands for 'moving average'. For various reasons, chartists like to view the average share price for the last 13 days, in comparison to the average share price over the last 49 days, and also over the last 200 days. If you chart these averages in lines, they will sometimes cross over each other as they head in various directions. In PRD's case, the lines have been fairly flat recently and drifting slightly downwards as the sp has been subdued and drifting lower after a period of little expected news. We all know the sp has risen in the last few days after the last RNS. Therefore, the short term line, the 13, has started rising, and rising quicker than the other lines, as it is only an average of the last 13 days. Of course the sp here is very news driven, but a Golden Cross, when the 13 line crosses over the long term 200 day line, is often used by larger and institutional investors as a firm indicator of an uptrend. All very positive stuff!
https://www.investopedia.com/terms/g/goldencross.asp
This explains it also. Also, when a short term line crosses over longer term lines in a downward direction - further falls are often expected so a good time to exit. Good luck here.