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After Golden Cross, Xilio Therapeutics, Inc. (XLO)'s Technical Outlook is Bright

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

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.

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.

XLO could be on the verge of a breakout after moving 10.1% higher over the last four weeks. Plus, the company is currently a #3 (Hold) on the Zacks Rank.

The bullish case only gets stronger once investors take into account XLO's positive earnings outlook for the current quarter. There have been 2 upwards revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

Moving Average Chart for XLO

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


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