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Banco Bilbao (BBVA) Now Trades Above Golden Cross: Time to Buy?

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From a technical perspective, Banco Bilbao Viscaya Argentaria S.A. (BBVA - Free Report) is looking like an interesting pick, as it just reached a key level of support. BBVA's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world.

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

BBVA has rallied 9.8% over the past four weeks, and the company is a #1 (Strong Buy) on the Zacks Rank at the moment. This combination indicates BBVA could be poised for a breakout.

Once investors consider BBVA'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 2 revisions higher, and the Zacks Consensus Estimate has increased as well.

Moving Average Chart for BBVA

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


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