Elastic (ESTC) Recently Broke Out Above the 20-Day Moving Average

After reaching an important support level, Elastic (ESTC) could be a good stock pick from a technical perspective. ESTC surpassed resistance at the 20-day moving average, suggesting a short-term bullish trend.

A well-liked tool among traders, the 20-day simple moving average offers a look back at a stock's price over a 20-day period. This is very beneficial to short-term traders, as it smooths out short-term price trends and gives more trend reversal signals than longer-term moving averages.

Similar to other SMAs, if a stock's price moves above the 20-day, the trend is considered positive, while price falling below the moving average can signal a downward trend.

Over the past four weeks, ESTC has gained 7.5%. The company is currently ranked a Zacks Rank #2 (Buy), another strong indication the stock could move even higher.

The bullish case only gets stronger once investors take into account ESTC's positive earnings estimate revisions. There have been 7 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.

Investors may want to watch ESTC for more gains in the near future given the company's key technical level and positive earnings estimate revisions.

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

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