After reaching an important support level, Lovesac (LOVE) could be a good stock pick from a technical perspective. LOVE surpassed resistance at the 20-day moving average, suggesting a short-term bullish trend.
The 20-day simple moving average is a well-liked trading tool because it provides a look back at a stock's price over a 20-day period. Additionally, short-term traders find this SMA very beneficial, as it smooths out short-term price trends and shows 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.
LOVE could be on the verge of another rally after moving 15.9% higher over the last four weeks. Plus, the company is currently a Zacks Rank #3 (Hold) stock.
The bullish case solidifies once investors consider LOVE's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 3 higher, while the consensus estimate has increased too.
Investors may want to watch LOVE for more gains in the near future given the company's key technical level and positive earnings estimate revisions.
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