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Should You Buy Pembina Pipeline (PBA) After Golden Cross?

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After reaching an important support level, Pembina Pipeline Corp. (PBA - Free Report) could be a good stock pick from a technical perspective. PBA 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.

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, PBA has gained 9.8%. The company currently sits at a #2 (Buy) on the Zacks Rank, also indicating that the stock could be poised for a breakout.

Looking at PBA's earnings expectations, investors will be even more convinced of the bullish uptrend. For the current quarter, there have been 4 changes higher compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

Moving Average Chart for PBA

With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on PBA for more gains in the near future.


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