Should You Buy Western Union (WU) After Golden Cross?
The Western Union Company (WU) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, WU's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."
A golden cross is a technical chart pattern that can signify a potential bullish breakout. It's formed from a crossover involving a security's short-term moving average breaking above a longer-term moving average, with the most common moving averages being 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.
A golden cross contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.
Shares of WU have been moving higher over the past four weeks, up 8.9%. Plus, the company is currently a #2 (Buy) on the Zacks Rank, suggesting that WU could be poised for a breakout.
The bullish case only gets stronger once investors take into account WU's positive earnings outlook for the current quarter. There have been 1 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 WU for more gains in the near future.
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The Western Union Company (WU) : Free Stock Analysis Report
