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Should You Buy AXT (AXTI) After Golden Cross?


AXT Inc (AXTI) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, AXTI's 50-day simple moving average crossed above its 200-day simple moving average, known as a "golden cross."

Considered an important signifier for a bullish breakout, a golden cross is a technical chart pattern that's formed when a stock's short-term moving average breaks above a longer-term moving average; the most common crossover involves the 50-day and the 200-day, since bigger time periods tend to form stronger breakouts.

Golden crosses have three key stages that investors look out for. It starts with a downtrend in a stock's price that eventually bottoms out, followed by the stock's shorter moving average crossing over its longer moving average and triggering a trend reversal. The final stage is when a stock continues the upward climb 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.

Shares of AXTI have been moving higher over the past four weeks, up 24.7%. Plus, the company is currently a #3 (Hold) on the Zacks Rank, suggesting that AXTI could be poised for a breakout.

The bullish case solidifies once investors consider AXTI'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.

Moving Average Chart for AXTI

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

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AXT Inc (AXTI): Free Stock Analysis Report

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

Zacks Investment Research


Source Zacks-com

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At Zacks, we are dedicated to independent investment research, helping investors succeed through tools like our Zacks Rank stock-rating system, which has averaged +23.89% annual returns since 1988. Founded on the discovery that earnings estimate revisions drive stock prices, we offer purely mathematical, unbiased ratings, along with additional innovations like the Price Response Indicator, Earnings ESP, and specialized rankings for mutual funds and ETFs.
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