Alto Ingredients (ALTO) Just Flashed Golden Cross Signal: Do You Buy?

After reaching an important support level, Alto Ingredients, Inc. (ALTO) could be a good stock pick from a technical perspective. ALTO 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.

There are three stages to a golden cross. First, there must be a downtrend in a stock's price that eventually bottoms out. Then, the stock's shorter moving average crosses over its longer moving average, triggering a positive trend reversal. The third stage is when a stock continues the upward momentum 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.

Shares of ALTO have been moving higher over the past four weeks, up 58.9%. Plus, the company is currently a #1 (Strong Buy) on the Zacks Rank, suggesting that ALTO could be poised for a breakout.

Looking at ALTO's earnings expectations, investors will be even more convinced of the bullish uptrend. For the current quarter, there have been 1 change higher compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

Investors may want to watch ALTO 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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