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First Commonwealth Financial (FCF)'s Technical Outlook is Bright After Key Golden Cross

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From a technical perspective, First Commonwealth Financial Corporation (FCF - Free Report) is looking like an interesting pick, as it just reached a key level of support. FCF'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.

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.

Shares of FCF have been moving higher over the past four weeks, up 12%. Plus, the company is currently a #2 (Buy) on the Zacks Rank, suggesting that FCF could be poised for a breakout.

Once investors consider FCF'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 4 revisions higher, and the Zacks Consensus Estimate has increased as well.

Moving Average Chart for FCF

Investors should think about putting FCF on their watchlist given the ultra-important technical indicator and positive move in earnings estimates.


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