Danaos (DAC) Just Flashed Golden Cross Signal: Do You Buy?
Danaos Corporation (DAC) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, DAC'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.
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.
DAC has rallied 6.6% over the past four weeks, and the company is a #1 (Strong Buy) on the Zacks Rank at the moment. This combination indicates DAC could be poised for a breakout.
Once investors consider DAC's positive earnings outlook for the current quarter, the bullish case only solidifies. No earnings estimate has gone lower in the past two months compared to 1 revisions higher, and the Zacks Consensus Estimate has increased as well.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on DAC 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
Danaos Corporation (DAC) : Free Stock Analysis Report
