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Genpact (G) Just Flashed Golden Cross Signal: Do You Buy?

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After reaching an important support level, Genpact Limited (G - Free Report) could be a good stock pick from a technical perspective. G 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.

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.

G could be on the verge of a breakout after moving 13.8% higher over the last four weeks. Plus, the company is currently a #2 (Buy) on the Zacks Rank.

The bullish case solidifies once investors consider G's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 6 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.

Moving Average Chart for G

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


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