Methanex (MEOH) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, MEOH crossed above 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.
MEOH could be on the verge of another rally after moving 5.9% 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 MEOH'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.
Given this move in earnings estimate revisions and the positive technical factor, investors may want to keep their eye on MEOH for more gains in the near future.
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