A death cross forms when the 50 SMA falls below the 200 SMA. When a death cross forms it means a sharp downward move for the stock. What happened to the Apple Stock AAPL. It had been doing very well. Then suddenly it fell and now the price has fallen below $120 per share level.
So you can well imagine how much fickle the market can be. A slight miss in the quarterly earnings has started the downward spiral and a death cross seems to be forming meaning for the first time 50 SMA will drop below the long term 200 SMA. This death cross means the short term downtrend in the stock price is not short term but long term.
Adam Sarhan, CEO of financial advisory firm Sarhan Capital, said he turned bearish on Apple’s stock earlier this month, after being bullish for about 1 1/2 years, because it broke below key support, including the 200-day moving average.