From a technical perspective, Vicor Corporation (VICR) is looking like an interesting pick, as it just reached a key level of support. VICR'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.
There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term moving average. Typically, a golden cross involves the 50-day and the 200-day moving averages, 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.
This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.
VICR has rallied 54.8% over the past four weeks, and the company is a #1 (Strong Buy) on the Zacks Rank at the moment. This combination indicates VICR could be poised for a breakout.
Looking at VICR's earnings expectations, investors will be even more convinced of the bullish uptrend. For the current quarter, there have been 2 changes higher compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.
Given this move in earnings estimates and the positive technical factor, investors may want to keep their eye on VICR for more gains in the near future.
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Vicor Corporation (VICR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).