BeOne Medicines Ltd. - Sponsored ADR (ONC) Now Trades Above Golden Cross: Time to Buy?

BeOne Medicines Ltd. - Sponsored ADR (ONC) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, ONC's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."

There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term moving average. Typically, a golden cross involves the 50-day and the 200-day moving averages, since bigger time periods tend to form stronger breakouts.

A successful golden cross event has three stages. It first begins when a stock's price on the decline bottoms out. Then, its shorter moving average crosses above its longer moving average, triggering a positive trend reversal. The third and final phase occurs when the stock maintains its upward momentum.

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 ONC have been moving higher over the past four weeks, up 14.1%. Plus, the company is currently a #1 (Strong Buy) on the Zacks Rank, suggesting that ONC could be poised for a breakout.

Looking at ONC's earnings expectations, investors will be even more convinced of the bullish uptrend. For the current quarter, there have been 2 changes higher compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

Investors should think about putting ONCon their watchlist given the ultra-important technical indicator and positive move in earnings estimates.

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

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