ImmunityBio, Inc. (IBRX) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, IBRX'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.
This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.
IBRX has rallied 66.1% over the past four weeks, and the company is a #2 (Buy) on the Zacks Rank at the moment. This combination indicates IBRX could be poised for a breakout.
The bullish case only gets stronger once investors take into account IBRX's positive earnings outlook for the current quarter. There have been 1 upwards revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.
Investors should think about putting IBRX on their watchlist given the ultra-important technical indicator and positive move in earnings estimates.
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