After Golden Cross, Synovus Financial (SNV)'s Technical Outlook is Bright

Synovus Financial Corp. (SNV) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, SNV'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.

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.

A golden cross contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.

SNV has rallied 18.4% over the past four weeks, and the company is a #3 (Hold) on the Zacks Rank at the moment. This combination indicates SNV could be poised for a breakout.

Once investors consider SNV's positive earnings outlook for the current quarter, the bullish case only solidifies. No earnings estimate has gone lower in the past two months compared to 9 revisions higher, and the Zacks Consensus Estimate has increased as well.

With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on SNV for more gains in the near future.

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This article originally published on Zacks Investment Research (zacks.com).

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