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Sierra Wireless (SWIR)'s Technical Outlook is Bright After Key Golden Cross

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From a technical perspective, Sierra Wireless, Inc. (SWIR - Free Report) is looking like an interesting pick, as it just reached a key level of support. SWIR'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 is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.

Over the past four weeks, SWIR has gained 10.5%. The company currently sits at a #2 (Buy) on the Zacks Rank, also indicating that the stock could be poised for a breakout.

The bullish case solidifies once investors consider SWIR's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 4 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.

Moving Average Chart for SWIR

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


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