Smartsheet (SMAR) Just Flashed Golden Cross Signal: Do You Buy?
After reaching an important support level, Smartsheet (SMAR) could be a good stock pick from a technical perspective. SMAR recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average.
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.
There are three stages to a golden cross. First, there must be a downtrend in a stock's price that eventually bottoms out. Then, the stock's shorter moving average crosses over its longer moving average, triggering a positive trend reversal. The third stage is when a stock continues the upward momentum to higher prices.
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, SMAR has gained 14.4%. The company currently sits at a #2 (Buy) on the Zacks Rank, also indicating that the stock could be poised for a breakout.
Once investors consider SMAR's positive earnings outlook for the current quarter, the bullish case only solidifies. No earnings estimate has gone lower in the past two months compared to 7 revisions higher, and the Zacks Consensus Estimate has increased as well.
Investors may want to watch SMAR for more gains in the near future given the company's key technical level and positive earnings estimate revisions.
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Smartsheet (SMAR) : Free Stock Analysis Report
