Top Stocks Just Forming Golden Crosses
Late last year, we talked a lot about ‘death crosses’. Those are the stock chart patterns that technical analysts consider exceptionally bearish. A death cross consists of a certain moving average crossing below another, and an expected follow-through to the downside for the stock price. Now that we’ve seen a sharp rebound and strong recovery for stocks since late December, we thought it fitting to highlight the top stocks forming ‘golden crosses’. You might have guessed by now that a golden cross is simply the opposite of a death cross. It’s where a certain moving average crosses above another instead of below, and technical analysts consider it highly bullish.
What is a Golden Cross?
A golden cross is a chart pattern usually defined by technical analysis as a shorter-term moving average crossing above a longer-term moving average. Typically, the most common moving averages used in this pattern are the 50-day and 200-day moving averages. The golden cross doesn’t happen all too often on most major stocks or indexes. Because of this, it’s one of the most widely watched technical formations that exists. It’s also among the patterns that technical analysts consider most bullish, or positive. The expectation is that a stock will often extend its rise further after a golden cross.
Here’s a quick graphical example of both a golden cross and a death cross on a chart:
S&P 500 Stocks Just Entering Golden Crosses
There aren’t very many major stocks that have recently entered golden crosses since the overall market rebound and recovery that began in late December. Indeed, the S&P 500 itself is still trading very much under a death cross despite the recent rally.
Also, keep in mind that most of the stocks listed below (with the exception of DE) had a death cross shortly before the recent golden cross. With that said, here are the top stocks within the S&P 500 currently trading above a recent golden cross:
- FAST: Fastenal Company (up over 13% year-to-date)
- BIIB: Biogen Inc. (up over 12% year-to-date)
- DE: Deere & Company (up over 10% year-to-date)
- TDG: TransDigm Group (up over 4% year-to-date)
- DHR: Danaher Corporation (up over 4% year-to-date)
IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors.
Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.
Senior Technical Analyst at The Technicals
As a momentum stock trader, Luke focuses mostly on strong market moves. Luke has been trading the markets since the early 2000s, but still gets excited by big movers. Whether a surging large-cap tech company or meteoric penny stock, Luke tracks and trades winners. A technical analysis purist, Luke authors many of our Top Stocks & ETFs reports. Contact Luke