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JAPAN TOB (JAPAY) Now Trades Above Golden Cross: Time to Buy?

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After reaching an important support level, JAPAN TOB (JAPAY - Free Report) could be a good stock pick from a technical perspective. JAPAY recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average.

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.

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 contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.

JAPAY has rallied 22.6% over the past four weeks, and the company is a #1 (Strong Buy) on the Zacks Rank at the moment. This combination indicates JAPAY could be poised for a breakout.

Once investors consider JAPAY's positive earnings outlook for the current quarter, the bullish case only solidifies. No earnings estimate has gone lower in the past two months compared to 3 revisions higher, and the Zacks Consensus Estimate has increased as well.

Moving Average Chart for JAPAY

Given this move in earnings estimates and the positive technical factor, investors may want to keep their eye on JAPAY for more gains in the near future.


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