Based on technical analysis, OPENLANE, Inc. (KAR) appears to be a promising investment opportunity. The stock has touched a critical support level. A "golden cross" occurred when KAR's 50-day simple moving average rose above its 200-day simple moving average.
One technical indicator of a possible bullish breakthrough is a golden cross. It is created when a security's shorter-term moving average crosses over a longer-term moving average
The 50-day and 200-day moving averages are the most popular choices because breakouts are stronger for longer time periods.
A golden cross consists of three parts. A stock price decline that hits rock bottom is the first condition. Soon after, a bullish trend reversal is signaled when the stock's shorter moving average crosses above its longer moving average. When the upward momentum of a stock price continues, it enters the third stage.
Technically speaking, this chart pattern indicates future bearish price movement; in contrast, a death cross indicates future bullish price movement.
With a 12.9% increase in value over the previous four weeks, KAR is currently a #1 (Strong Buy) on the Zacks Rank. Given these factors, KAR may be about to make a significant move.
The good earnings expectation for KAR further strengthens the bullish case. Despite three upward revisions to earnings estimates in the last 60 days, none of them have been lowered for the current quarter. Also, the Zacks Consensus Estimate is higher now.
Investors may wish to keep a watch on KAR for further rises in the near future, given this movement in earnings forecasts and the favorable technical indicator.
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