Mercer International (MERC)'s Technical Outlook is Bright After Key Golden Cross
Mercer International Inc. (MERC) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, MERC's 50-day simple moving average broke out above its 200-day moving average; this is 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.
A golden cross contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.
Over the past four weeks, MERC has gained 13.3%. The company currently sits at a #1 (Strong Buy) on the Zacks Rank, also indicating that the stock could be poised for a breakout.
Looking at MERC's earnings expectations, investors will be even more convinced of the bullish uptrend. For the current quarter, there have been 1 changes higher 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 MERC for more gains in the near future.
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