Should You Buy AvidXchange Holdings, Inc. (AVDX) After Golden Cross?
From a technical perspective, AvidXchange Holdings, Inc. (AVDX) is looking like an interesting pick, as it just reached a key level of support. AVDX's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world.
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.
A successful golden cross event has three stages. It first begins when a stock's price on the decline bottoms out. Then, its shorter moving average crosses above its longer moving average, triggering a positive trend reversal. The third and final phase occurs when the stock maintains its upward momentum.
This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.
AVDX has rallied 13.7% over the past four weeks, and the company is a #1 (Strong Buy) on the Zacks Rank at the moment. This combination indicates AVDX could be poised for a breakout.
The bullish case solidifies once investors consider AVDX's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 4 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.
Given this move in earnings estimates and the positive technical factor, investors may want to keep their eye on AVDX for more gains in the near future.
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AvidXchange Holdings, Inc. (AVDX) : Free Stock Analysis Report
