After Golden Cross, City Holding (CHCO)'s Technical Outlook is Bright
City Holding Company (CHCO) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, CHCO's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."
There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term moving average. Typically, a golden cross involves the 50-day and the 200-day moving averages, since bigger time periods tend to form stronger breakouts.
Golden crosses have three key stages that investors look out for. It starts with a downtrend in a stock's price that eventually bottoms out, followed by the stock's shorter moving average crossing over its longer moving average and triggering a trend reversal. The final stage is when a stock continues the upward climb to higher prices.
A golden cross is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.
CHCO has rallied 6.1% over the past four weeks, and the company is a #3 (Hold) on the Zacks Rank at the moment. This combination indicates CHCO could be poised for a breakout.
The bullish case solidifies once investors consider CHCO's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 3 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 CHCO for more gains in the near future.
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City Holding Company (CHCO) : Free Stock Analysis Report
