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A handful of stocks could see a rally ahead, according to a bullish price chart pattern closely watched by technical analysts. Disney and Cadence Design Systems are among the few companies that have recently formed or are about to signal the “golden cross” pattern , a phenomenon that’s used to identify stocks that could be breaking out into a new long-term trend. The pattern occurs when an asset’s 50-day moving average rises above its 200-day moving average, and analysts typically want to see the 200-day upwardly sloping as well. Outperformance from these names could occur as the three major U.S. indexes race ahead this year. The S & P 500 and Nasdaq Composite also notched fresh record highs Wednesday. Take a look below at the stocks we found, using FactSet data: Disney is one of the companies that is about to form a “golden cross.” The stock has ripped ahead this year, climbing more than 28.5% — just slightly higher than the broader-market’s gains. Daiwa reiterated Disney as a buy in late November, expecting “streaming margin expansion” for the movie studio and theme park operator. The firm believes the company stands out compared to its peers in that its streaming revenues are offsetting the industry’s declining linear business. Disney’s stock has taken off over the past month after posting stronger-than-expected earnings and guidance, helped by growth in its streaming business. The company forecasted high-single-digit adjusted earnings growth in fiscal 2025. Cadence Design Systems is another stock that could soon form the chart pattern. Shares have jumped more than 12% over the past month, driven by its strong third-quarter earnings report. The company had also increased the midpoint of its outlook for non-GAAP earnings per share in 2024. This year, the stock is up nearly 19.3%. Wells Fargo recently initiated coverage of Cadence Design Systems with an overweight rating and $350 price target, which suggests nearly 12% potential upside for the computational software provider. Longer term, analyst Joe Quatrochi said the company is “well-positioned” to benefit from its artificial intelligence-related products, such as its AI chip offerings and the integration of AI features in its existing software-based products. “We think a ramping hardware cycle looking into 2025 can drive accelerating revenue growth (including China), which we view as not fully factored into Street ests,” Quatrochi said in a Nov. 22 note. Chevron has already formed a golden cross, indicating future upside ahead. Indeed, analysts polled by FactSet have an overweight rating and $173.05 price target on shares, which implies a possible gain of 6.9%. Chevron shares are up just more than 6% this year. Looking at the oil giant’s performance this year, Citi analyst Alastair Syme upgraded shares to buy from neutral on Nov. 26, on the belief that Chevron’s discount relative to peers has opened up an attractive entry point for investors.
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