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Golden Cross Pattern Signals Potential Rally in Select Stocks

2023.11.30

 

Key Takeaways

  • “Golden cross” pattern observed in three stocks, indicating potential upcoming rallies.
  • Historical data suggests average 6% rise in these stocks following the pattern’s emergence.

The Golden Cross: A Bullish Market Indicator

The “golden cross” is a chart pattern that occurs when a stock’s short-term moving average (50-day) crosses above its long-term average (200-day). This pattern is regarded by Wall Street as a bullish sign, often predicting a potential rally. Currently, three stocks are about to signal this promising pattern, coinciding with a nearly 10% rally in the S&P 500.

Spotlight on Descartes Systems, Stryker Corporation, and Deutsche Boerse

Three stocks have caught the attention of technical analysts due to their imminent golden cross patterns. Descartes Systems, a Canadian company, has historically seen a 7% rise post-pattern. Stryker Corporation, a medical device manufacturer, has an average rise of 4.4%. Deutsche Boerse, Germany’s largest stock exchange operator, has typically seen a 6.5% increase. These patterns, identified through CNBC Pro’s technical analysis, indicate potential growth.

Fundamental Analysis and Future Expectations

Investment banks and stockbrokers analyze these stocks based on fundamental factors like profitability, growth potential, and more. Descartes Systems is expected to report strong third-quarter results with significant organic growth. Stryker Corp received a positive outlook from RBC analysts, reinforcing their “Outperform” rating. Deutsche Boerse, while maintaining a “neutral” rating from UBS, has a favorable three-year plan.

Methodology Behind the Analysis

The stocks analyzed are part of the MSCI World Index, representing around 1,500 stocks from developed markets. These companies are significant in their respective markets and typically have high liquidity. The analysis focused on stocks within 2% of experiencing a moving average crossover, using simple moving averages for calculation. Stocks from certain Nordic countries and Singapore were excluded due to data limitations.

 

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