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Livent (LTHM) Just Flashed Golden Cross Signal: Do You Buy?
Livent Corporation (LTHM - Free Report) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, LTHM's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."
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.
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 is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.
LTHM could be on the verge of a breakout after moving 32.7% higher over the last four weeks. Plus, the company is currently a #2 (Buy) on the Zacks Rank.
The bullish case only gets stronger once investors take into account LTHM's positive earnings outlook for the current quarter. There have been 5 upwards revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on LTHM for more gains in the near future.