Will the Golden Cross Pattern Prove to be a Beacon of Hope for Investors?

The stock market has been on a wild ride in recent months, with August's global market rout followed by a September slump. Amidst this volatility, CNBC Pro screened FactSet for stocks forming or approaching a golden cross pattern, a chart indicator that suggests a potential breakout. Of the three names developing this pattern, Cardinal Health is the only one that has surged this year, rising over 12%. Its 50-day moving average of $103.31 is approaching its 200-day moving average of $104.14, signaling a potential golden cross. This comes after Cardinal Health's quarterly results beat Wall Street's expectations, sending the stock soaring 3% higher. The prescription drug distributor has been dealing with volatile shipping prices, but conditions have improved since pandemic-era disruptions. But what if this assumption is wrong? What if the golden cross pattern is not a reliable indicator of future gains? Have analysts considered alternative perspectives or overlooked potential red flags?

Breaking down the report, we find that MarketAxess Holdings has already surpassed its 200-day moving average, indicating possible future gains. While shares have plummeted over 13% this year, they have risen over 29% in the past three months. The Street is largely neutral on the name, with nine of the 14 analysts covering the stock issuing hold ratings. But what if these analysts are missing something? Are there other factors at play that could impact the company's performance? SBA Communications has also seen a golden cross move, with its 50-day moving average already surpassing its 200-day moving average. Shares have rallied in recent months, up over 25% in the past three months. However, unlike MarketAxess, analysts are largely bullish on SBA, with 13 of the 18 analysts covering the stock issuing strong buy or buy ratings. What might the authors have missed in their analysis? Are they considering the broader implications of the golden cross pattern or simply relying on historical data? Have they considered alternative indicators or signals that could provide a more accurate picture of the market?

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