SiteOne Landscape (SITE)'s Technical Outlook is Bright After Key Golden Cross

From a technical perspective, SiteOne Landscape Supply, Inc. (SITE) is looking like an interesting pick, as it just reached a key level of support. SITE'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.

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.

Shares of SITE have been moving higher over the past four weeks, up 10.9%. Plus, the company is currently a #2 (Buy) on the Zacks Rank, suggesting that SITE could be poised for a breakout.

Once investors consider SITE'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 3 revisions higher, and the Zacks Consensus Estimate has increased as well.

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