One of the ways that you use the moving average information is by following a rule called the Golden Cross or the Death Cross. Here is how it works. When a stocks price begins a move up, the shorter term moving average will generally begin below the longer term moving average. So, the 50 day moving average will be below the 200 day moving average. As the price continues its ascent, the 50 day moving average will cross the 200 day moving average and continue above it until there is a change in the price action of the stock. The point at which the shorter term moving average moves above the longer term moving average is known as the Golden Cross, and is considered a buy point. Conversely, when the 50day moving average crosses the 200day moving average to the downside, it is known as the Death Cross, and is considered a sell point. The 200 moving average will drop the longer the 50 moving average stays near it's average. When the price for the 50 day moving average overtakes the 200 day moving average this signals a bullish trend is about to begin.
