Chemed (CHE) Now Trades Above Golden Cross: Time to Buy?
Chemed Corporation (CHE) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, CHE's 50-day simple moving average crossed above its 200-day simple moving average, 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.
There are three stages to a golden cross. First, there must be a downtrend in a stock's price that eventually bottoms out. Then, the stock's shorter moving average crosses over its longer moving average, triggering a positive trend reversal. The third stage is when a stock continues the upward momentum to higher prices.
This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.
CHE could be on the verge of a breakout after moving 12.9% higher over the last four weeks. Plus, the company is currently a #3 (Hold) on the Zacks Rank.
The bullish case only gets stronger once investors take into account CHE'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 CHE for more gains in the near future.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Chemed Corporation (CHE) : Free Stock Analysis Report
