Ticker&TapeThe 200-day line: the long-term trend filter
The 200-day moving average covers about ten months of trading. It is the simplest way to tell whether a stock, or the whole market, is in a long-term uptrend or a long-term downtrend.
A long-term trend filter
If price is above a rising 200-day line, the long-term trend is up. If price is below a falling 200-day line, the long-term trend is down. That simple test removes a huge number of weak stocks from your list.
On the weekly chart, the 40-week moving average is roughly the same line. Stage analysis uses it to separate stage 2 advances from stage 4 declines. See the four stages.
Leaders trade above it
True market leaders almost always trade well above their 200-day line, with the line sloping up. A stock below its 200-day has been rejected by big investors for months. It may look cheap, but it is not a leader.
A good habit is to require price above both the 50-day and 200-day lines, with the 50-day above the 200-day and the 200-day rising for at least a month. You can apply filters like these on the screener.
The market and the 200-day
Many traders watch where the S&P 500 and Nasdaq sit relative to their 200-day lines. Long, damaging bear markets tend to happen below the line. The breadth page also shows the percentage of stocks above their 200-day, which tells you how broad the long-term uptrend really is.
Golden cross and death cross
A golden cross is when the 50-day line crosses above the 200-day. A death cross is when it crosses below. They get a lot of headlines, but they come with caveats:
- They lag badly. By the time the lines cross, price has often moved a long way.
- In choppy, sideways markets they flip back and forth and give false signals.
- A death cross often appears near the end of a decline, when selling is already mature.
- Price action and volume, plus market direction, are better guides.
How traders use it
Use the 200-day line as a filter rather than a trigger. It answers one question: is this stock in a long-term uptrend? Buy points come from bases and pivots, and sell signals usually come earlier, from the 50-day line or a stop loss. A stock that falls to its 200-day line has usually already broken several warning signs on the way down.
Common mistakes
- Buying a stock below its 200-day line because it looks like a bargain.
- Trading golden and death crosses as stand-alone buy and sell signals.
- Waiting for the 200-day line to break before selling a former leader.
Key points
- Price above a rising 200-day line means a long-term uptrend.
- Real leaders trade above their 200-day; laggards trade below it.
- Golden and death crosses lag and are poor signals on their own.
On Ticker&Tape today
Live examples from the latest close, updated every trading day. Examples, not recommendations. 2026-10-02
Check what you learned
Answer at least 2 of 3 correctly to complete the lesson.
1. Which situation signals a long-term uptrend?
Above a rising 200-day line, the long-term trend is up. Below a falling one, it is down. That simple test removes many weak stocks.
2. What is the main problem with golden crosses and death crosses?
Crosses come late and give false signals in sideways markets. Price action, volume and market direction are better guides.
3. How do traders in this method use the 200-day line?
Buy points come from bases and pivots, and sell signals usually come earlier, from the 50-day line or a stop. The 200-day answers one question: is the long-term trend up?
Check stocks above their 200-day → Try it on Ticker&Tape