Cactus, Inc. (WHD)'s Technical Outlook is Bright After Key Golden Cross

Cactus, Inc. (WHD) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, WHD'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.

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

WHD has rallied 10.9% over the past four weeks, and the company is a #3 (Hold) on the Zacks Rank at the moment. This combination indicates WHD could be poised for a breakout.

Looking at WHD's earnings expectations, investors will be even more convinced of the bullish uptrend. For the current quarter, there have been 2 changes 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 WHD 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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