SNDL Inc. (SNDL)'s Technical Outlook is Bright After Key Golden Cross

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

A successful golden cross event has three stages. It first begins when a stock's price on the decline bottoms out. Then, its shorter moving average crosses above its longer moving average, triggering a positive trend reversal. The third and final phase occurs when the stock maintains its upward momentum.

A golden cross is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.

Over the past four weeks, SNDL has gained 69.2%. The company currently sits at a #2 (Buy) on the Zacks Rank, also indicating that the stock could be poised for a breakout.

Once investors consider SNDL'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 1 revision 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 SNDL 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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