Moving averages of price says: If 50-day moving average rises above 200-day moving average then it’s a buy signal.
Why? If it short-term crosses the long-term line, doesn’t it mean that soon it will go down to long-term line, hence price will decrease?
Well not soon. But yes chances are it will go down eventually, if you believe that it will revert to mean.
However if you are trading on momentum, you would buy on that signal, and cover the trade once (for example) the 50 dma starts flattening, or other indicators tell you to get out.
I think momentum strategies are inherently short term
Thanks, understood!