Primis Financial Corp. (FRST) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, FRST's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."
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.
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.
FRST could be on the verge of a breakout after moving 7.9% 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 FRST'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 FRST on their watchlist given the ultra-important technical indicator and positive move in earnings estimates.
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