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Teradyne (TER) Now Trades Above Golden Cross: Time to Buy?

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  • TER

From a technical perspective, Teradyne, Inc. (TER) is looking like an interesting pick, as it just reached a key level of support. TER'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.

There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term moving average. Typically, a golden cross involves the 50-day and the 200-day moving averages, 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.

A golden cross contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.

TER could be on the verge of a breakout after moving 30.3% higher over the last four weeks. Plus, the company is currently a #2 (Buy) on the Zacks Rank.

Looking at TER's earnings expectations, investors will be even more convinced of the bullish uptrend. For the current quarter, there have been 7 changes higher compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

Moving Average Chart for TER
Moving Average Chart for TER

With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on TER for more gains in the near future.


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