Hooker Furniture (HOFT)'s Technical Outlook is Bright After Key Golden Cross
Hooker Furnishings Corp. (HOFT) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, HOFT's 50-day simple moving average crossed above its 200-day simple moving average, 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.
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 is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.
HOFT could be on the verge of a breakout after moving 39.7% higher over the last four weeks. Plus, the company is currently a #1 (Strong Buy) on the Zacks Rank.
The bullish case solidifies once investors consider HOFT'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.
Given this move in earnings estimates and the positive technical factor, investors may want to keep their eye on HOFT for more gains in the near future.
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Hooker Furnishings Corp. (HOFT) : Free Stock Analysis Report
