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United Rentals (URI) Now Trades Above Golden Cross: Time to Buy?

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After reaching an important support level, United Rentals, Inc. (URI - Free Report) could be a good stock pick from a technical perspective. URI 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.

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, URI has gained 20.8%. 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 URI'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 URI

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


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