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Legacy Housing (LEGH)'s Technical Outlook is Bright After Key Golden Cross

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Legacy Housing Corporation (LEGH - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, LEGH's 50-day simple moving average crossed above its 200-day simple moving average, known as a "golden cross."

A golden cross is a technical chart pattern that can signify a potential bullish breakout. It's formed from a crossover involving a security's short-term moving average breaking above a longer-term moving average, with the most common moving averages being 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 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, LEGH has gained 7.6%. The company currently sits at a #3 (Hold) on the Zacks Rank, also indicating that the stock could be poised for a breakout.

The bullish case solidifies once investors consider LEGH'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 LEGH

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


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