Home Bancorp, Inc. (HBCP) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, HBCP'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.
A successful golden cross event has three stages. It first begins when a stock's price on the decline bottoms out. Then, its shorter moving average crosses above its longer moving average, triggering a positive trend reversal. The third and final phase occurs when the stock maintains its upward momentum.
This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.
Over the past four weeks, HBCP has gained 19.1%. The company currently sits at a #1 (Strong Buy) on the Zacks Rank, also indicating that the stock could be poised for a breakout.
The bullish case solidifies once investors consider HBCP's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 2 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on HBCP for more gains in the near future.
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Home Bancorp, Inc. (HBCP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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