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Lovesac (LOVE) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, LOVE broke through the 20-day moving average, which suggests 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 16.8% higher over the last four weeks. Plus, the company is currently a Zacks Rank #1 (Strong Buy) stock.
The bullish case only gets stronger once investors take into account LOVE's positive earnings estimate revisions. There have been 3 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 LOVE for more gains in the near future given the company's key technical level and positive earnings estimate revisions.
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