Plumas Bancorp Now Trades Above Golden Cross: Time to Buy?

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

A golden cross is a technical chart pattern that can signify a potential bullish breakout. It's formed from a crossover involving a security's short-term moving average breaking above a longer-term moving average, with the most common moving averages being the 50-day and the 200-day, since bigger time periods tend to form stronger breakouts.

There are three stages to a golden cross. First, there must be a downtrend in a stock's price that eventually bottoms out. Then, the stock's shorter moving average crosses over its longer moving average, triggering a positive trend reversal. The third stage is when a stock continues the upward momentum to higher prices.

This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.

Shares of PLBC have been moving higher over the past four weeks, up 22.3%. Plus, the company is currently a #2 (Buy) on the Zacks Rank, suggesting that PLBC could be poised for a breakout.

The bullish case solidifies once investors consider PLBC's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 1 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.

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

To read this article on Zacks.com click here.