After Golden Cross, Brink's (BCO)'s Technical Outlook is Bright

From a technical perspective, Brink's Company (The) (BCO) is looking like an interesting pick, as it just reached a key level of support. BCO's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world.

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.

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.

Over the past four weeks, BCO has gained 18.5%. The company currently sits at a #1 (Strong Buy) on the Zacks Rank, also indicating that the stock could be poised for a breakout.

The bullish case only gets stronger once investors take into account BCO's positive earnings outlook for the current quarter. There have been 2 upward revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

Given this move in earnings estimates and the positive technical factor, investors may want to keep their eye on BCO 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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