After reaching an important support level, Enphase Energy (ENPH) could be a good stock pick from a technical perspective. ENPH surpassed resistance at the 20-day moving average, suggesting a short-term bullish trend.
The 20-day simple moving average is a popular trading tool. It provides a look back at a stock’s price over a 20-day period, and is beneficial to short-term traders since it smooths out price fluctuations and provides more trend reversal signals than longer-term moving averages.
Like other SMAs, if a stock’s price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.
ENPH has rallied 18.9% over the past four weeks, and the company is a Zacks Rank #3 (Hold) at the moment. This combination suggests ENPH could be on the verge of another move higher.
The bullish case solidifies once investors consider ENPH’s positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 10 higher, while the consensus estimate has increased too.
Investors may want to watch ENPH for more gains in the near future given the company’s key technical level and positive earnings estimate revisions.
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