TSX stocks with (or nearing) ‘golden crosses’ or ‘death crosses’

From a technical perspective, the stock chart for Canadian Pacific Railway Ltd. (CP-T) is encouraging. Earlier this month, the share price experienced a bullish technical signal called a "Golden Cross".

A "Golden Cross" occurs when a short-term moving average, in this case the 50-day moving average, crosses above a longer-term moving average, in this case the 200-day moving average. When this occurs, it marks a potentially positive signal suggesting the upward price momentum may have traction.

Many traders suggest waiting until the 50-day moving average crosses over the 200-day moving average by a certain percentage, such as 3 per cent, to confirm the bullish signal.

The stock faces initial overhead resistance around $200, and after there is resistance around the $210 level.

Should the share price reverse course and drift lower, there is initial downside support around $180, which is close to its 50-day moving average, and failing that, there is support around $175, near its 200-day moving average.

From a fundamental perspective, the Street is forecasting modest upside potential for this stock based on the average one-year target price of $212.47. One-year target prices range from a low of $197 to a high of $249. There is only one target price below $200.

According to Bloomberg, there are 18 "buy" recommendations, nine "hold" recommendations, and one "sell" recommendation. The consensus earnings per share estimate is $10.59 in 2016, and forecast to rise nearly 15 per cent to $12.17 in 2017.

On a valuation basis, according to Bloomberg, the stock is trading at a price-to-earnings multiple of 16 times the 2017 consensus estimate, which is slightly below its historical three-year average multiple of 16.8 times.

Below is a list identifying securities with recent, as well as potential future, Golden Crosses and Death Crosses. The death cross is a potentially bearish signal for a stock that occurs when the shorter-term moving average crosses below the longer-term moving average.

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This report is based on technical analysis. Technical analysis does not replace fundamental analysis, but can help identify companies worth having a closer look at and performing fundamental due diligence research on.