Telecom Argentina (TEO) Just Flashed Golden Cross Signal: Do You Buy?

Telecom Argentina Stet - France Telecom S.A. (TEO) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, TEO'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.

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.

A golden cross is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.

Shares of TEO have been moving higher over the past four weeks, up 12.2%. Plus, the company is currently a #3 (Hold) on the Zacks Rank, suggesting that TEO could be poised for a breakout.

Looking at TEO'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.

With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on TEO 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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