In This Article:
From a technical perspective, Canaan Inc. Sponsored ADR (CAN) is looking like an interesting pick, as it just reached a key level of support. CAN'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.
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.
A golden cross contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.
CAN has rallied 78.4% over the past four weeks, and the company is a #2 (Buy) on the Zacks Rank at the moment. This combination indicates CAN could be poised for a breakout.
The bullish case solidifies once investors consider CAN's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 0 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on CAN for more gains in the near future.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Canaan Inc. Sponsored ADR (CAN) : Free Stock Analysis Report