Wyndham Hotels (WH)'s Technical Outlook is Bright After Key Golden Cross
After reaching an important support level, Wyndham Hotels & Resorts (WH) could be a good stock pick from a technical perspective. WH recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average.
Considered an important signifier for a bullish breakout, a golden cross is a technical chart pattern that's formed when a stock's short-term moving average breaks above a longer-term moving average; the most common crossover involves the 50-day and the 200-day, 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.
This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.
Shares of WH have been moving higher over the past four weeks, up 5.5%. Plus, the company is currently a #1 (Strong Buy) on the Zacks Rank, suggesting that WH could be poised for a breakout.
Once investors consider WH'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 1 revisions higher, and the Zacks Consensus Estimate has increased as well.
Investors should think about putting WH on their watchlist given the ultra-important technical indicator and positive move in earnings estimates.
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