Clean Energy Fuels Corp. (CLNE) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, CLNE's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."
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 CLNE have been moving higher over the past four weeks, up 8.7%. Plus, the company is currently a #3 (Hold) on the Zacks Rank, suggesting that CLNE could be poised for a breakout.
The bullish case only gets stronger once investors take into account CLNE's positive earnings outlook for the current quarter. There have been 0 upward revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on CLNE for more gains in the near future.
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Clean Energy Fuels Corp. (CLNE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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