After Golden Cross, Bassett Furniture (BSET)'s Technical Outlook is Bright
Bassett Furniture Industries, Incorporated (BSET) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, BSET'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.
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.
Over the past four weeks, BSET has gained 43.2%. The company currently sits at a #3 (Hold) on the Zacks Rank, also indicating that the stock could be poised for a breakout.
The bullish case solidifies once investors consider BSET's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 2 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.
Investors should think about putting BSET on their watchlist given the ultra-important technical indicator and positive move in earnings estimates.
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