Should You Buy ConnectOne Bancorp (CNOB) After Golden Cross?

ConnectOne Bancorp, Inc. (CNOB) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, CNOB's 50-day simple moving average broke out above its 200-day moving average; this is 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.

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, CNOB has gained 10.4%. The company currently sits at a #3 (Hold) on the Zacks Rank, also indicating that the stock could be poised for a breakout.

Once investors consider CNOB'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.

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