Beam Therapeutics Inc. (BEAM)'s Technical Outlook is Bright After Key Golden Cross

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

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.

This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.

BEAM has rallied 6.8% over the past four weeks, and the company is a #2 (Buy) on the Zacks Rank at the moment. This combination indicates BEAM could be poised for a breakout.

The bullish case only gets stronger once investors take into account BEAM's positive earnings outlook for the current quarter. There have been 1 upward revision 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 BEAM 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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