If history is any guide, there may be trouble ahead for shares of VMwareVMW. 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 VMware, which is trading around $150.155 at publication time.
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Remember: Seasoned investors don't blindly trade Death Crosses.
Instead, they use it as a signal to start looking for short positions based on other factors, like price levels and company fundamentals & events.
For seasoned investors, this is just a sign that it might be time to start considering possible short positions.
With that in mind, take a look at VMware's past and upcoming earnings expectations:
| Quarter | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 |
|---|---|---|---|---|
| EPS Estimate | 1.64 | 1.73 | 2.05 | 1.43 |
| EPS Actual | 1.75 | 1.76 | 2.21 | 1.66 |
| Revenue Estimate | 3.10 B | 2.98 B | 3.23 B | 2.81 B |
| Revenue Actual | 3.14 B | 2.99 B | 3.29 B | 2.86 B |
Do you use the Death Cross signal in your trading or investing? Share this article with a friend if you found it helpful!
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