In the sometimes complicated world of technical analysis it often pays to just keep things simple. Part of my daily analysis of the market includes checking the list of companies that are making technical moves as their patterns grow stronger. The simplest way to do this is to scan my database for stocks that are completing a “Silver Cross” or “Gold Cross”.
A Silver Cross happens when a stock’s 20-day moving average crosses above its 50-day moving average.
Golden Crosses are signaled when a stock’s 50-day moving average moves above its 200-day moving average.
In both cases, a shorter-term trendline crossing above a longer-term trendline usually signifies a transition from either a correction or consolidation into an uptrend, and thus it’s typically a bullish catalyst for the stock.
Another property of stocks that have seen a Silver or Gold Cross is that they are gaining positive momentum. This means that their bullish trends are gaining even more strength.
My models scan for gold and silver crosses each day to find stocks moving 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.)
While the “cross” puts a stock on my radar, I learn everything that I need to know by putting eyes on the charts and following a few simple rules..
Stocks making a Silver or Gold Cross may be in a trading range that is likely to continue.
Look at the chart for Equinix (EQIX) below. The trading range is clear by the fact that the two trendlines are relatively flat and directionless. This makes it easier for the trendlines to make “crosses” more often, resulting in almost worthless signals.
Bottom line, I’m not likely to see a fast and aggressive move from the stock so I’m taking a pass.
When both the 20- and 50-day trendlines are rising it’s a cue that you’re on to something.
Following one of my Ten Commandments of Trading, the Trend is your friend. This is almost always represented by a rising 50-day moving average. On average, a stock is likely to close higher the next day two out of three times when the 50-day is rising. That’s usually a trend worth trading.
The fact that the 20-day is making a cross above the bullish 50-day tells you that a stock is making a breakout into another trading trend higher. These are usually followed by a bullish breakout.
The chart of Met Life (MET) is a good example.
Bottom line: These are the type of stocks that traders want to take a closer look at.
As a reminder, a Golden Cross is formed when a stock’s 50-day moving average crosses above its 200-day moving average.
The pattern is a signal of increasing bullish momentum for a stock.
As of Today, there are only 10 stocks in the S&P 500 that have completed a Golden Cross pattern in the last five days. They can be found in the table below.
Clorox (CLX) is a leading global manufacturer of consumer and professional products, headquartered in Oakland, California. Known for its disinfecting and cleaning products.
Clorox’s portfolio includes household brands like Clorox, Pine-Sol, Glad, and Burt's Bees.
It operates in over 100 countries worldwide.
The company is considered a consumer staple, meaning that they supply products that tend to be less elastic in demand when the economy slows down.
The stock price is showing the value of being a consumer staple company as investors begin to worry about the economy slowing.
Shares are trading in a bullish trend according to the rising 50-day moving average. That trendline just crossed above the stock’s 200-day moving average to form a bullish Golden Cross.
Watch for momentum to drive the stock to a target price of $200 as investors continue to look for dividend yielding growth stocks in 2025.
Another area of the market that is likely to stay strong during an economic slowdown is the medical technology industry.
Medtronic (MDT) is known for their various health “appliances” like pacemakers and other devices that address cardiac, vascular, neurological, and diabetes-related conditions.
Shares of Medtronic are trading 12% higher for the year, but shares just made a momentum breakout above $85 a few weeks ago after their earnings results impressed investors.
A result of that breakout is the Golden Cross that just formed on the stock as it gains positive momentum.
Shares are now preparing to break above $90, which will clear a way to the stock breaking above $100 on its way to a target of $125.
Sticking with the medical industry, medical supplier Teleflex (TFX) is on the list of stocks forming a bullish Golden Cross.
Teleflex, founded in 1943, is a global medical technology company specializing in products for critical care, surgery, and vascular access.
Headquartered in Pennsylvania, it offers innovative devices such as catheters, airway management tools, and surgical instruments, serving healthcare providers worldwide to improve patient outcomes.
Shares of TFX just formed a bullish Golden Cross patter as the stock is heading towards a $250 price, but that’s the beginning.
Shares just broke into a new long-term bullish trend two months ago, meaning that the stock is gaining long-term strength.
Watch for a $275 price target on shares of Teleflex over the next 3-6 months.
