From a technical perspective, 3D Systems Corporation (DDD) is looking like an interesting pick, as it just reached a key level of support. DDD'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.
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.
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.
This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.
DDD has rallied 63.9% over the past four weeks, and the company is a #2 (Buy) on the Zacks Rank at the moment. This combination indicates DDD could be poised for a breakout.
The bullish case solidifies once investors consider DDD'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.
Investors should think about putting DDDon their watchlist given the ultra-important technical indicator and positive move in earnings estimates.
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3D Systems Corporation (DDD): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).