3 Stocks Flashing Big, Bullish Signals

In the world of stock charts and technical analysis, the “golden cross” and “silver cross” are patterns that represent an improved outlook for a stock.

golden cross silver cross technical analysisA golden cross occurs when a stock’s 50-day moving average crosses above its 200-day MA, while a silver cross sees a stock’s 20-day trendline cross above its 50-day MA.

In both cases, a shorter-term trendline crossing above a longer-term trendline signifies a transition from either a correction or consolidation into an uptrend, and thus it’s typically a bullish catalyst for the stock.

We scan for gold crosses and silver crosses every day to find stocks moving back into Wall Street’s fast lane. (As traders, we’re more interested in silver crosses because they’re more likely to develop into better, faster gains.)

Here are three stocks we like thanks to recent gold or silver crosses:

Wendy’s Co (WEN): Silver Cross

wen stock silver cross

An already bullish outlook on Wendys Co (NASDAQ:WEN) improved following a recent silver cross. We’ve tested this pattern since WEN’s inception and found that it’s a steady outperformer against the S&P 500 after these signals flare.

Wendy’s current sentiment is a great setup for an uncrowded trade as only 30% of the analysts covering the stock have it ranked a “buy,” while 60% are in the “hold” category. Additionally, short interest on WEN stock has been on a consistent climb lately as shares have been building to the top of its price range.

This sentiment profile is the signature of an “uncrowded” stock. The break above the $11.50 mark is going to see the shorts covering their positions and also should get the analyst community on the move to start upgrading the shares.

WEN stock appears ready to move to the $14 mark.

Zions Bancorporation (ZION): Golden Cross

golden cross zion stock

Regional banks have started to make their move higher as investors are foraging for companies that will have improved outlooks on higher interest rates. While Zions Bancorporation (NASDAQ:ZION) shares have been lagging the market over the short run, the recent golden cross signals that the longer-term trend is on the rise.

In addition to the trendline improvements, ZION is leading the regional banks in terms of performance over the past three months. The relative strength leadership of ZION shares will help attract buying power from technical traders.

ZION shares are considered “undercrowded” as well, with only 36% of the analysts covering the stock rating it a “buy,” meaning that the improving trends are likely to grab the attention of analysts, garnering more bullish activity with upgrades.

A move above $29.50 will shoot the stock to the $33 target in short order.

Leggett and Platt, Inc. (LEG): Silver Cross

leggett and platt leg stock silver cross

Rumors of the housing market’s demise, or at least its slowdown, may have been slightly exaggerated as housing-related stocks continue their powerful rally. Names like Sherwin-Williams Co (NYSE:SHW) and Leggett & Platt serve as proof. LEG shares just completed another silver cross this week, signaling a high likelihood that the stock will soon make a run at posting new highs, which would have the stock north of $52.88.

The last occurrence of a silver cross on LEG shares was in October 2014, just ahead of a 25% rally. The current technical picture is very similar to the October snapshot. In addition, sentiment towards the housing-related stocks remains pessimistically skewed, telling us that the crowd is more likely to move into these names as they defy market expectations.

We love the combination of positive technicals and negative sentiment as an indicator that the contrarian outlook for LEG shares is more bullish than it was a week ago.

Watch for a move to the $53 level over the summer.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/05/3-stocks-golden-cross-silver-wen-leg-zion/.

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