After reaching an important support level, Porch Group, Inc. (PRCH) could be a good stock pick from a technical perspective. PRCH 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.
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.
PRCH could be on the verge of a breakout after moving 104.3% 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 PRCH'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.
Investors may want to watch PRCH for more gains in the near future given the company's key technical level and positive earnings estimate revisions.
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