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Perdoceo Education (PRDO) Now Trades Above Golden Cross: Time to Buy?

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After reaching an important support level, Perdoceo Education Corporation (PRDO - Free Report) could be a good stock pick from a technical perspective. PRDO 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.

This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.

Shares of PRDO have been moving higher over the past four weeks, up 29.2%. Plus, the company is currently a #2 (Buy) on the Zacks Rank, suggesting that PRDO could be poised for a breakout.

The bullish case solidifies once investors consider PRDO's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 1 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.

Moving Average Chart for PRDO

Investors may want to watch PRDO for more gains in the near future given the company's key technical level and positive earnings estimate revisions.


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