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Northwest Pipe Co. (NWPX) Just Flashed Golden Cross Signal: Do You Buy?

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From a technical perspective, Northwest Pipe Company (NWPX) is looking like an interesting pick, as it just reached a key level of support. NWPX's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world.

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 contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.

NWPX has rallied 27.9% over the past four weeks, and the company is a #3 (Hold) on the Zacks Rank at the moment. This combination indicates NWPX could be poised for a breakout.

Looking at NWPX'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.

Moving Average Chart for NWPX
Moving Average Chart for NWPX

Investors may want to watch NWPX for more gains in the near future given the company's key technical level and positive earnings estimate revisions.


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