Should You Buy TPG RE Finance Trust (TRTX) After Golden Cross?

TPG RE Finance Trust, Inc. (TRTX) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, TRTX's 50-day simple moving average crossed above its 200-day simple moving average, known as a "golden cross."

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.

Golden crosses have three key stages that investors look out for. It starts with a downtrend in a stock's price that eventually bottoms out, followed by the stock's shorter moving average crossing over its longer moving average and triggering a trend reversal. The final stage is when a stock continues the upward climb 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.

TRTX has rallied 12.8% over the past four weeks, and the company is a #2 (Buy) on the Zacks Rank at the moment. This combination indicates TRTX could be poised for a breakout.

Once investors consider TRTX'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 2 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 TRTX 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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