Vertiv Holdings Co. (VRT)'s Technical Outlook is Bright After Key Golden Cross

From a technical perspective, Vertiv Holdings Co. (VRT) is looking like an interesting pick, as it just reached a key level of support. VRT'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.

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.

VRT could be on the verge of a breakout after moving 13.9% higher over the last four weeks. Plus, the company is currently a #2 (Buy) on the Zacks Rank.

The bullish case solidifies once investors consider VRT's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 1 revision higher in the past 60 days. The Zacks Consensus Estimate has increased too.

Investors should think about putting VRTon their watchlist given the ultra-important technical indicator and positive move in earnings estimates.

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This article originally published on Zacks Investment Research (zacks.com).

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