These stocks are forming the winning golden cross pattern as the year comes to a close
There’s more upside ahead for a select handful of stocks, according to a price chart pattern closely watched by technical analysts as a bullish signal. The phenomenon, known as a “golden cross,” is viewed as a potential rally to come. It occurs when an asset’s 50-day moving average rises above the longer-term 200-day moving average. Typically, technical analysts want to see the 200-day upwardly sloping as well. Since it entails the short-term average breaking through the long-term average, it identifies stocks making a comeback that are breaking out into a new long-term trend. The six stocks below, ranging from a financial heavyweight to a railway operator, have either formed or are about to signal the golden cross pattern. Goldman Sachs is one of the companies that has already formed the price pattern. The stock is on a tear this month, up 13% in December alone as fears of a recession lessen. Wells Fargo analyst Mike Mayo is optimistic on the company’s path toward stability and its goal to build more durable revenue streams, particularly as it looks to expand its addressable market in already successful spots such as investment banking and lending to corporate clients. The financial giant is also “making good headway with AI capabilities,” Mayo wrote in a Dec. 5 note. Real estate investment trust Kimco Realty Corporation could be in for a rally, according to the pattern. The stock has jumped 26% this quarter, partly fueled by increased optimism that 2024 could be the year for interest rate cuts. Kimco declared a one-time, special dividend of $0.09 per share of common stock on Nov. 13. In August, the company had announced it is acquiring RPT Realty in a deal worth $2 billion, which would will add 56 open-air shopping centers to Kimco’s portfolio. Nike is another stock that’s about to form a golden cross. Shares have soared 28% this quarter. They’re now up 5.1% for the year. Several firms are bullish on the sports apparel retailer ahead of its earnings due after market close on Thursday, thinking that bad news is already priced into this year’s underperformance. Analysts are also optimistic that sales momentum will continue next year — especially after Nike’s back-to-school performance outpaced the retail industry — as new products are added to the company’s portfolio. On Monday, Deutsche Bank adjusted its price target slightly higher to $132 and kept its buy rating. Citigroup upgraded the stock to buy from neutral on Dec. 11 and raised its price target to $135. In the week prior, RBC Capital Markets kept its overweight rating and upped its price target to $120 and Goldman assumed Nike with a buy rating on an improved growth and margin outlook. American Tower Corporation , another REIT, has seen its shares pop more than 29% this quarter. It has also had a rough year, however, gaining only 0.7%. The company, which is buy rated according to analysts on FactSet, increased its quarterly distribution on Thursday by 8 cents to $1.70. Railroad company Norfolk Southern Corporation is about to form a “golden cross.” Shares have popped roughly 19% this quarter. Shares got a bump after Bank of America upgraded the stock to buy from neutral earlier this month, saying Norfolk Southern’s shipping car volumes “appear to have bottomed” after a tough year for the company, including a derailment in Ohio in early February. “The frequency of incidents had caused us increasing concern, yet the speed of improvement suggests improved resiliency,” analyst Ken Hoexter wrote in a Dec. 1 note. Of the six stocks, Equifax has had the greatest share price gain this year, up nearly 25% in 2023. Shares are trading 32% higher so far this quarter. The consumer credit reporting agency was recently upgraded to buy by Jefferies, Wells Fargo and Deutsche Bank. “With headwinds dissipating and us having greater conviction in the Workforce Solutions moat, our new higher resolution model suggests the potential for sustainable multi-year double-digit revenue and earnings growth on continued strong pricing power, TWN records growth, client penetration, and a return to more normalized volumes in mortgage,” Jefferies analyst Surinder Thind wrote in a Monday note. — With reporting by CNBC’s Nick Wells.
