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EnerSys (ENS) Now Trades Above Golden Cross: Time to Buy?

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Enersys (ENS - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, ENS's 50-day simple moving average crossed above its 200-day simple moving average, 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.

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.

ENS has rallied 17.3% over the past four weeks, and the company is a #2 (Buy) on the Zacks Rank at the moment. This combination indicates ENS could be poised for a breakout.

The bullish case solidifies once investors consider ENS's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 2 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.

Moving Average Chart for ENS

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


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