After reaching an important support level, Daqo New Energy (DQ) could be a good stock pick from a technical perspective. DQ 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.
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.
DQ has rallied 17% over the past four weeks, and the company is a Zacks Rank #3 (Hold) at the moment. This combination suggests DQ could be on the verge of another move higher.
The bullish case only gets stronger once investors take into account DQ's positive earnings estimate revisions. There have been 2 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on DQ for more gains in the near future.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
DAQO New Energy Corp. (DQ) : Free Stock Analysis Report
To read this article on Zacks.com click here.