AXT (AXTI)'s Technical Outlook is Bright After Key Golden Cross
AXT Inc (AXTI) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, AXTI's 50-day simple moving average crossed above its 200-day simple moving average, known as a "golden cross."
Considered an important signifier for a bullish breakout, a golden cross is a technical chart pattern that's formed when a stock's short-term moving average breaks above a longer-term moving average; the most common crossover involves the 50-day and the 200-day, since bigger time periods tend to form stronger breakouts.
Golden crosses have three key stages that investors look out for. It starts with a downtrend in a stock's price that eventually bottoms out, followed by the stock's shorter moving average crossing over its longer moving average and triggering a trend reversal. The final stage is when a stock continues the upward climb to higher prices.
A golden cross contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.
Shares of AXTI have been moving higher over the past four weeks, up 37.2%. Plus, the company is currently a #2 (Buy) on the Zacks Rank, suggesting that AXTI could be poised for a breakout.
The bullish case only gets stronger once investors take into account AXTI's positive earnings outlook for the current quarter. There have been 4 upwards revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on AXTI for more gains in the near future.
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