Monolithic Power (MPWR) Crossed Above the 20-Day Moving Average: What That Means for Investors
Should investors be excited or worried when a stock crosses above the 20-day simple moving average?
Monolithic Power (MPWR) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, MPWR crossed above 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.
The 20-day moving average can show signals that are similar to other SMAs as well. 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.
MPWR has rallied 10.7% over the past four weeks, and the company is a Zacks Rank #2 (Buy) at the moment. This combination suggests MPWR could be on the verge of another move higher.
The bullish case solidifies once investors consider MPWR's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 1 higher, while the consensus estimate has increased too.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on MPWR for more gains in the near future.
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Monolithic Power Systems, Inc. (MPWR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).