Should You Buy Pediatrix Medical Group (MD) After Golden Cross?

After reaching an important support level, Pediatrix Medical Group, Inc. (MD) could be a good stock pick from a technical perspective. MD recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average.

Considered an important signifier for a bullish breakout, a golden cross is a technical chart pattern that's formed when a stock's short-term moving average breaks above a longer-term moving average; the most common crossover involves 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 MD have been moving higher over the past four weeks, up 39.6%. Plus, the company is currently a #1 (Strong Buy) on the Zacks Rank, suggesting that MD could be poised for a breakout.

The bullish case only gets stronger once investors take into account MD's positive earnings outlook for the current quarter. There have been 5 upward revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

Investors may want to watch MD for more gains in the near future given the company's key technical level and positive earnings estimate revisions.

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This article originally published on Zacks Investment Research (zacks.com).

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